Ittavira Mathai vs Varkey Varkey And Another
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: supreme-court
Case Number: Civil Appeal No. 372 of 1960
Decision Date: 15 January 1963
Coram: J.R. Mudholkar, Syed Jaffer Imam, Raghubar Dayal
The Supreme Court of India delivered its judgment on 15 January 1963 in the case titled Ittavira Mathai versus Varkey Varkey and Another. The judgment was authored by Justice J.R. Mudholkar and the bench comprised Justices J.R. Mudholkar, Syed Jaffer Imam and Raghubar Dayal. The petitioner was Ittavira Mathai and the respondents were Varkey Varkey and another individual. The decision was reported in 1964 AIR 907 and 1964 SCR (1) 495, and it has been cited in several subsequent reports including R 1965 SC 1325, R 1966 SC 430, R 1969 SC 823, F 1974 SC 994, and R 1988 SC 1531. The case involved questions of limitation, the effect of a decree rendered after the prescribed period, the venue for appeal, and the powers of a receiver in possession of property. The statutory framework mentioned included the Travancore High Court Act 1099 (as repealed by Ordinance II of 1124), the Indian Limitation Act 1908, and Articles 17 and 142 of the Constitution.
According to the headnote, the deceased Ittavira, father of the appellant, had purchased several properties and paid a portion of the purchase price in cash, while the balance was secured by executing two hypothecation bonds in favour of his vendors, Ramalinga Iyer and Raman Vela Yudhan. Ramalinga Iyer subsequently assigned his hypothecation bond to Sankara Rama Iyer. Ramalinga also executed a promissory note in favour of Anantha Iyer, who, after Ramalinga’s death, instituted a suit against Ramalinga’s son, Sankara Subha Iyer, to recover the amount due under the note and obtained a decree in his favour. Treating the deed of assignment executed by Ramalinga Iyer in favour of Sankara Rama Iyer as a sham, Anantha Iyer attached the mortgagee rights of Ramalinga Iyer in the hypothecation bond and eventually purchased those rights. In a subsequent partition of Anantha Iyer’s family estate, the purchased mortgagee rights were allotted between Anantha and his brother.
Anantha and his brother then instituted suit O.S. No. 59 of 1093 against Ittavira, obtained a decree for the realisation of the amount claimed, and assigned that decree to Venkiteswara Iyer. At the court‑ordered auction held under the decree, Venkiteswara Iyer purchased the hypothecated properties that formed the subject of the present suit and assumed possession of those properties on 12 July 1099. Prior to the institution of O.S. No. 59 of 1093, Ittavira had executed a sale deed on 8 October 1093 conveying the same properties to his son, the appellant. The appellant was not a party to O.S. No. 59 of 1093. Ittavira died in the year 1107, and on 2 February 1108 Venkiteswara Iyer sold all the suit properties to the respondents. The respondents thereafter instituted proceedings under section 145 of the Code of Criminal Procedure before a magistrate, claiming possession of the properties, a claim that the appellant disputed. The magistrate ordered the attachment of the properties and placed them in the custody of a receiver appointed by the court.
The Court observed that after the Receiver had taken control of the properties, the Magistrate ordered that the appellant should continue to hold possession of those properties until a competent civil court issued a further order. The High Court of Travancore subsequently affirmed the Magistrate’s order, and the Receiver transferred possession of the properties to the appellant. In response to that transfer, the respondents instituted a separate suit, which forms the basis of the present appeal. The trial court dismissed the respondents’ suit, but the High Court reversed that dismissal and allowed the suit to proceed. Before the present Court, the respondents argued that the decree obtained by Anantha Iyer in O. S. 59 of 1093 should be regarded as a nullity because the underlying suit was barred by limitation. They further contended that the appeal before the High Court ought to have been heard by a bench of three judges, as required by Section II(1) of the Travancore High Court Act, 1099, rather than by a division bench consisting of only two judges.
The Court held that if a suit is indeed barred by limitation yet a court nevertheless grants a decree, the court commits an error of law and the aggrieved party may seek to set aside the decree by filing an appeal. However, the Court also reiterated the well‑known principle that a decree rendered by a court, even if erroneous, does not become a nullity; consequently, the precedent cited from 497 Maqbul Ahmad v. Onkar Pratap Narain Singh, A.I.R. 1935 P.C. 85, was inapplicable. The Court further noted that the question of limitation had not been raised before the High Court; because it was a mixed question of fact and law, it could not be newly raised before this Court. In the present case, the Court explained that the Receiver’s possession of the properties during the proceedings under Section 145 of the Code of Criminal Procedure effectively delayed the dispute, and when that period is taken into account, the respondents’ suit was filed within the prescribed limitation period. Moreover, the Court ruled that no party possesses a vested right to have an appeal heard by a specific number of judges, and the fact that the appeal was heard by a two‑judge bench did not infringe any right of the parties. The Court further stated that a litigant cannot claim that a tribunal, before which an appeal should have been taken at the time the suit was instituted, is invalid, unless it can be shown that the repeal of the Travancore High Court Act was unconstitutional. Absent such proof, any right of appeal that may have existed was lawfully abrogated by the competent legislature. The judgment then proceeded to list the civil appellate jurisdiction, identifying the appeal as Civil Appeal No. 372 of 1960, arising from the judgment and decree dated 6 April 1955 of the former High Court of Travancore‑Cochin in Appeal Suit No. 721 of 1951. The parties were represented by counsel for the appellant and counsel for the respondents. The judgment, delivered on 15 January 1963, was rendered by Justice Mudholkar, who noted that the present proceeding was an appeal by certificate from the judgment of the Travancore‑Cochin High Court that had allowed the respondents’ appeal.
The respondents challenged the decree of the District Court of Parur that dismissed their suit seeking a declaration of title, recovery of possession of certain properties and other consequential reliefs. The facts underlying the dispute are as follows. The twenty‑three items of property listed in the schedule to the plaint originally belonged to two individuals, namely Ramalinga Iyer—referred to as “Iyer” by the High Court—and Raman Velayudhan. On the sixth day of the sixth month of the Malayalam year 1080, which corresponds approximately to the year 1905, the two owners sold the whole bundle of properties to Ittivavira, the deceased father of appellant‑defendant No. 1. The purchase price was partly paid in cash by Ittivavira, and the balance was secured by two hypothecation bonds that he executed on the same date in favour of his vendors.
One of the bonds was executed in favour of Raman Velayudhan and secured the sum of Rs 308‑8‑0. In consideration of that amount, Ittiyavira hypothecated the specific items numbered 3, 5, 14 and 18 to Raman Velayudhan. The second bond was executed in favour of Ramalinga Iyer, under which Ittiyavira hypothecated items numbered 1, 2, 4, 6 through 13, 15 through 17, and 19 through 23, together with the remaining un‑hypothecated items, for the purpose of securing a larger sum of Rs 2,191‑80, subject to the earlier hypothecation in favour of Raman Velayudhan.
On the third day of the first month of the Malayalam year 1082, Ramalinga Iyer assigned his hypothecation bond to Sankara Rama Iyer, who is described as “Iyen” by the High Court. The validity of this assignment became a point of contention between the parties. One side alleged that the deed of assignment, identified as Exhibit V, was a sham document that was never intended to be operative, while the other side insisted that the deed was genuine and legally effective. It also appears that Ramalinga Iyer had earlier executed a promissory note in favour of Anantha Iyer, also described as “Iyen”. After the death of Ramalinga Iyer, Anantha Iyer commenced litigation against Ramalinga Iyer’s son, Sankara Subha Iyer, seeking recovery of the amount due under the note, and obtained a decree, marked as Exhibit VI, on the thirteenth day of the eleventh month of the Malayalam year 1088.
Treating the earlier deed of assignment to Sankara Rama Iyer as a fraudulent instrument, Anantha Iyer proceeded to attach the mortgagee rights that Ramalinga Iyer held in the hypothecation bond executed by Ittiyavira. Those mortgagee rights were subsequently sold in execution, and Anantha Iyer purchased them at a court auction. In a later partition of Anantha Iyer’s family estate, the purchased mortgagee rights were allocated between him and his brother Manicka Iyer, both referred to as “Iyen”. Following this allocation, the two brothers instituted civil suit O.S. No. 59 of 1093 in the District Court at Parur against Ittiyavira, seeking realisation of the amount secured by the hypothecation bond. The court awarded a decree in their favour, which the decree‑holders later transferred to Venkiteswara Iyer, again described as “Iyen”. Venkiteswara Iyer executed the decree and, at the auction held in execution of that decree, he personally purchased the hypothecated properties.
In this case, the properties that were the subject of the suit were identified on 27‑4‑1099, and a sale certificate recorded as Exhibit C was issued by the court to the purchaser. The purchaser, Venkiteswara Iyer, took actual possession of those properties on 12‑7‑1099. It also emerged that Raman Velayudhan had transferred the hypothecation bond that Ittiyavira had executed in his favour to another individual, who subsequently sued on the bond and obtained a decree in O.S. No. 462 of 1094 before the Munsiff of Moovattupuzha. Pursuant to that decree, the items numbered 3, 5, 14 and 18 were bought by Mathai Ouseph, the brother of the second defendant in the present suit, on 10‑11‑1096. In compliance with the decree, Mathai Ouseph received delivery of possession of those four items on 19‑6‑1098 and later sold them to defendant No. 2, the wife of the appellant, on 5‑12‑1104.
Even before the filing of O.S. No. 59 of 1093 by Anantha Iyer and his brother, Ittiyavira had executed a sale deed in favour of his son, the appellant, conveying all the properties that form the subject matter of the present suit; that sale deed was dated 8‑10‑1092. The appellant, however, was not made a party to O.S. No. 59 of 1093, and the respondents argued that the sale to the appellant was not a genuine transaction and therefore his inclusion as a necessary party to that suit was unwarranted. Ittiyavira died in the year 1107, and on 2‑2‑1108 Venkiteswara Iyer sold all of the suit properties to the respondents‑plaintiffs. Following that sale, the respondents commenced proceedings under section 145 of the Code of Criminal Procedure before the First Class Magistrate at Perumbavoor, asserting that they were in possession of the suit properties, that the appellant was disputing that possession, and that there was a likelihood of a breach of peace because the appellant might attempt to “obstruct” their possession. In those criminal proceedings the properties were attached and placed under the control of a court‑appointed Receiver. The magistrate eventually held that the properties were in the appellant’s possession and ordered that his possession be maintained until a competent civil court ordered otherwise. That order was affirmed by the Travancore High Court, after which the Receiver handed possession of the properties back to the appellant.
Subsequent to that order, the respondents filed a civil suit, which gives rise to the present appeal. In that suit they contend that the alleged sale by Ittiyavira to the appellant was a sham transaction, that the appellant therefore obtained no rights under it, and that consequently his implication as a party to O.S. No. 59 of 1093 was unnecessary. They also alleged that Mathai Ouseph did not acquire any rights from his auction purchase because the sale and delivery of possession in execution of the decree
In the proceedings identified as O. S. No. 462 of 1094, the properties referred to were alleged to have been held benami on behalf of Ittiyavira. Consequently, the respondents argued that the second defendant had acquired no legal right to the items numbered 3, 5, 14 and 18 that were specified in the plaint. The appellant challenged both the decree and the related execution proceedings that were issued in O. S. No. 497 of 1088. The appellant maintained that the decree and the execution were obtained through fraud perpetrated against the heirs of Ramalinga Iyer, because Ramalinga Iyer had previously assigned the hypothecation bond in favour of Sankara Rama Iyer on 3‑10‑1082. On this basis, the appellant asserted that Anantha Iyer had never acquired any rights to the hypothecation bond that Ittiyavira had executed in favour of Ramalinga Iyer, and that, consequently, Venkiteswara Iyer could not claim any rights arising from his purchase under the execution of the decree in O. S. No. 59 of 1093. The appellant described the entire series of proceedings as fraudulent and therefore not binding on Ittiyavira or on the suit properties. The respondents denied the allegation that the sale to the appellant was a sham transaction and also denied the other accusations concerning Mathai Ouseph’s purchase of items 3, 5, 14 and 18. The trial court dismissed the suit on those grounds. The High Court, however, set aside the trial court’s decision with the exception of items 3, 5, 4 and 18 as listed in the plaint schedule. Because the respondents filed no cross‑appeal or cross‑objections, the present appeal was limited to the remaining items in the plaint schedule. Counsel for the appellant raised, as the first point, the contention that the decree in O. S. No. 59 of 1093, which had been obtained by Anantha Iyer and his brother on the basis of the hypothecation bond executed by Ittiyavira in favour of Ramalinga Iyer, was a nullity because the underlying suit was barred by limitation. Even if the suit were time‑barred, the counsel’s argument that the decree could be treated as a nullity and disregarded in later litigation was considered difficult to accept. The court explained that if a suit were time‑barred yet a decree were still granted, the court would have committed an illegality, and the aggrieved party would be entitled to set aside the decree by filing an appeal. Nevertheless, the court affirmed the well‑settled principle that a court possessing jurisdiction over both the subject matter and the parties may decide correctly or incorrectly, but an error of decision does not remove the court’s jurisdiction. Because the court exercised jurisdiction over the matter and the parties, an error on a vital issue does not amount to an act beyond jurisdiction. Consequently, a decree rendered by a court, even if decided wrongly, cannot be declared a nullity. Counsel for the appellant, however, further referred to additional authorities in support of the limitation argument.
In this case, the counsel for the petitioner referred to the decision of the Privy Council in Maqbul‑Ahmed v. Onkar Pratap Narain and argued that, because the court is bound by section 3 of the Limitation Act to determine for itself whether the suit was filed within the prescribed period, the court would act without jurisdiction if it failed to make that determination. The decision that was relied upon states that section 3 of the Limitation Act is peremptory and that it is the duty of the court to notice this provision and give it effect even when the pleadings do not raise the question of limitation. However, the Privy Council did not hold that a failure to perform this duty deprives the court of jurisdiction. Rather, the Privy Council indicated that such a failure amounts only to an error of law, and an error of law can be corrected only in the manner prescribed by the Civil Procedure Code. Consequently, if the aggrieved party does not take the appropriate procedural steps to have the error corrected, the decree that was issued in error will continue to be valid and cannot be set aside on the ground that it is a nullity.
The second point raised by the counsel concerned the allegation that the present suit was time‑barred because it was not instituted within three years of the order of the First Class Magistrate of Perumbavoor, which held that the appellant was in possession of the suit properties. The order in question was dated 28‑12‑1111, while the suit was filed in the District Court at Parur on 4‑3‑1118; even if limitation were measured from the later order of the High Court dismissing the revision petition, the suit would still have been filed more than three years after that date. Nevertheless, the factual record shows that the plaint was originally instituted by the respondent in the court of the Munsiff at Movattupuzha, recorded as original suit No. 1296 of 1114. The appellant argued that the respondents’ valuation of the suit property was unduly low, prompting the court to appoint a Commissioner to ascertain the true value. The Commissioner reported that the property was worth Rs. 4,602, after which the court, on 21‑2‑1118, ordered the return of the plaint for presentation to the appropriate court because the total value of the relief claimed exceeded the pecuniary jurisdiction of the Munsiff court. The plaint was then presented by the respondents in the District Court at Parur. If the respondents had filed the suit in the Munsiff court within three years of the final order passed under section 145 of the Code of Criminal Procedure, and the plaint was merely returned for presentation to a higher court, they would be entitled, under section 14 of the Limitation Act, to have the entire period during which they pursued the suit with due diligence and in good faith deducted from the limitation period.
In this case the Court noted that the respondents had placed their confidence in the jurisdiction of the Munsiff’s Court. The Court explained that if the suit had been time‑barred at the moment it was filed in the Munsiff’s Court, the appellant could have raised a defence on that ground, but the defendants did not make such a plea. Consequently, the Court inferred that the suit must have been filed within the prescribed limitation period when it was originally instituted in the Munsiff’s Court. After the plaint was returned and re‑presented in the District Court at Parur, the appellant filed a written statement. The respondents, in paragraph 12 of the plaint, asserted that “the cause of action for this suit has arisen within the jurisdiction of this court from 15th Kanni 1113, the date of the final order in the summary case.” The appellant’s only response to this allegation appeared in paragraph 13 of its written statement, where it declared that the plaintiffs possessed no right whatsoever as alleged in paragraph 10 of the plaint, and even if any right existed it had become extinguished by limitation, rendering it unnecessary to consider the claim further. The appellant further stated that the plaintiffs had no entitlement to raise the matter in the present suit, pointing to the long lapse since the second defendant’s brother had taken possession of the properties in execution proceedings, and concluded that the plaintiffs were barred from making any such claim.
Below the plaint, the respondents also submitted a statement explaining that the suit had originally been filed in the Moovattupuzha Munsiff’s Court as O S No. 1296/1114. They claimed that the value of the suit properties was substantial, prompting the appointment of a Commissioner during trial to ascertain the correct valuation. The Commissioner reported the value as Rs 4,602 and 14 cents, after which the Moovattupuzha Munsiff’s Court issued an order on 21‑2‑1118 directing that the plaint be returned and re‑filed in the proper court with appropriate jurisdiction because the Munsiff’s Court could not try the case. According to that order, the plaint was received back on 30‑2‑1118, the correct valuation was shown, and the plaint was subsequently filed in the District Court together with the returned court‑fee memoranda. The Court observed that the appellant’s written statement made no reference to these averments. Because the appellant did not set out a clear limitation defence by stating the relevant facts and making the necessary allegations, the Court concluded that the trial court had been unable to decide on the limitation issue despite formally raising it. The Court indicated that, had the appellant seriously pressed the limitation plea, the trial court could have dismissed the suit on that ground without needing to examine the detailed factual issues concerning the merits of the case. The respondents, in their plaint, had claimed that the limitation period began on 15‑2‑1113, the date of the High Court’s dismissal of the revision petition, an argument that the appellant failed to counter effectively.
In this case the appellant argued that the limitation period for the suit should have begun on 15‑2‑1113, the date when the High Court dismissed the revision petition filed by the respondents. The appellant did not rely on Article 47 of the Limitation Act, which provides that the limitation period may be measured from the date of the original order rather than from the date of the revisional order. The court observed that, had the appellant made that submission, the respondents would almost certainly have amended the plaint to record the date on which the plaint was originally presented in the Court of the Munsiff. If the plaint had indeed been presented in the Munsiff’s Court, for example, two months before the limitation period expired, the suit would have been deemed timely when it was re‑filed in the District Court on 4‑3‑1118, because the limitation period would then have been calculated from the original order. The appellant could also have raised the limitation issue before the High Court while supporting the decree that had been granted to them by the trial court. Had they done so, the High Court would have examined its own records to determine whether the suit was filed within the prescribed period. The court noted that the question now before it was not a pure question of law but a mixed question of fact and law. Moreover, the appellant’s petition to the High Court did not contain any specific ground seeking a certificate on the basis that the suit was time‑barred. Consequently, the court declined to grant the appellant leave to raise the limitation issue at this stage.
The next argument advanced by counsel was that the suit fell under Article 142 of the Limitation Act and that the respondents had failed to establish possession of the property within twelve years, thereby rendering the suit barred by time. The appellant’s submission on this point was intertwined with a separate claim that the delivery of possession to the auction‑purchaser in O.S. No. 59 of 1093 was a sham and fraudulent transaction. The appellant contended that he himself possessed the properties at the time of the purported delivery and that he had actively obstructed the hand‑over to the auction‑purchaser. He further asserted that the Gamin who was tasked with effecting the delivery failed to remove his obstruction, and therefore the report recorded in Exhibit D, which relates to the delivery of possession, merely indicated a symbolic transfer rather than a real one. Nevertheless, Exhibit D, on its face, showed that actual possession of the properties had been handed over by the Amin to the auction‑purchaser pursuant to the execution sale. The court observed that a presumption of regularity normally attaches to court records and that such a presumption cannot be lightly discarded. In addition to this presumption, the court considered the testimony of Plaintiff‑Witness 2, Vasu Vasu Elayath, who was one of the individuals who had attested the report in Exhibit D. He swore that the delivery of possession had indeed taken place as described in the exhibit.
The Court observed that the Amin had arrived at the property and had handed over possession to the auction‑purchaser. The High Court had previously noted that the Amin was a respectable resident of the neighbourhood and that, because nothing was uncovered in his cross‑examination to tarnish his credibility, his testimony should be accepted. In addition, the Court considered the evidence of PW 3, Meeralava Osakkal Rawther, who was also present at the moment of delivery. Exhibit D records that the fee for beating a drum at the time of possession was paid to PW 3, and that he had affixed his signature to that exhibit. PW 3 testified that the actual delivery of possession to the auction‑purchaser occurred exactly as described in Exhibit D, and the High Court had admitted his evidence without objection. The Court found no reason to depart from that view of the evidence.
Counsel for the appellant, however, referred the Court to Exhibit J, a petition dated 16‑7‑1009 filed by the appellant in the District Court, Parur, in O.S. No. 59 of 1093, which was submitted only four days after the alleged delivery of possession. The counsel argued that this petition demonstrated the appellant’s continued possession of the properties. The petition, however, merely stated: “For the reasons stated in the accompanying affidavit it is prayed that the Court may be pleased to declare my possession and rights etc. over the properties mentioned in the decree in the above suit and to hold that the said properties are not liable to be sold for the said decree, and to allow this petition with costs.” Accordingly, the appellant sought a declaration of his right to possession and did not allege that he had obstructed the Amin’s delivery of possession to the auction‑purchaser.
The District Judge had recorded an order to the effect that, since the appellant did not assert that he had been dispossessed, his application could not be sustained. In the absence of any specific averments of obstruction, the Court concluded that the appellant could not derive any benefit from the petition. It was further submitted before both the High Court and the present Court that the appellant had sent an obstruction petition to the Amin, but no certified copy of such a petition was produced, nor was the Amin examined to substantiate that claim.
Agreeing with the High Court, the Court held that there was no doubt that the Amin had effected the actual delivery of possession of the suit properties to the auction‑purchaser on 12‑7‑1099. The Court also noted that a finding under Section 145 of the Criminal Procedure Code indicated that the appellant was in possession, but clarified that this finding merely meant that the appellant was in possession at the date of the preliminary order issued in those criminal proceedings.
The Court observed that a preliminary order had been issued in the criminal proceedings under section 145 of the Code of Criminal Procedure. In view of the Court’s finding that actual delivery of possession had been made to the auction‑purchaser on 12‑7‑1099, the Court held that the appellant’s possession as of the date of the preliminary order could have arisen only by trespass after that delivery, and most probably during the disputes which had compelled the respondents to commence the criminal proceedings under the same statutory provision. Consequently, the Court concluded that the present suit could not be characterized as an action by the auction‑purchasers to recover property on the basis of an execution sale in their favour; rather, it was an action for eviction of a person who had obtained wrongful possession of the property by trespass after the court‑ordered delivery of possession had taken place.
The Court further explained that after the respondents filed the application under section 145, the magistrate who entertained the application ordered the attachment of the property and placed it in the custody of a Receiver. The Receiver remained in possession of the property until the final decision in those criminal proceedings. The Court noted that the Receiver’s possession during that period necessarily protected the interest of the party who eventually succeeded in the proceedings. Accordingly, if the period of the Receiver’s possession is taken into account, the respondents’ suit was deemed to have been filed within a proper time.
The Court then turned to the argument raised by counsel that Anantha Iyer and his brother acquired no rights from the attachment and sale of the hypothecation bond executed by Ittiyavira in favour of Ramalinga Iyer, because Ramalinga Iyer had, long before their purchase, assigned that bond to Sankara Rama Iyer. The respondent contended that Exhibit V, which purported to document the assignment, was a sham created by Ramalinga Iyer to conceal the hypothecation bond from his creditors and to preserve the amount for his own benefit. The Court found that the evidence, including the testimony of the appellant himself, showed that Ramalinga Iyer was heavily indebted at the time Exhibit V was executed. After executing Exhibit V, Ramalinga Iyer, who had presented the document for registration before the Sub‑Registrar, subsequently retrieved the document from the registrar. No evidence was offered to demonstrate that Ramalinga Iyer thereafter delivered the document to Sankara Rama Iyer, nor that Sankara Rama Iyer accepted the transaction.
The Court noted that the principal consideration described in Exhibit V consisted of amounts alleged to be owed by Ramalinga Iyer to his creditors, which the assignee was supposed to discharge. The balance of the consideration was not paid at the time Exhibit V was executed; instead, it was alleged to have been set off against amounts owed by Ramalinga Iyer to the assignee, Sankara Rama Iyer. The Court observed that there was no evidence that any of the debts listed in the document were actually due, nor that any money had been received by the appellant from Sankara Rama Iyer. Moreover, the appellant had not even stated that he had made any enquiry concerning the consideration mentioned in the document.
The Court noted that no enquiry had been made regarding the consideration of the document in question. It further observed that, although the document had been executed in the year 1082, even to the present day neither Sankara Rama Iyer nor any person claiming under him had taken any step to realise the amounts due under the hypothecation bond. The High Court had expressed its view in the following terms: “If the assignment had been a genuine transaction intended to take effect, the assignee would not have foregone the amount under the hypothecation bond, especially when he was required to obtain a large sum from Ramalinga Iyer and also paid an additional consideration as mentioned in Ex. V. The fact that the assignee made no attempt to realise the amount under the hypothecation bond during the thirty‑two years that elapsed after the assignment and before the institution of the present suit amounts almost to proof positive that the assignment was not a genuine transaction but a sham document executed for the purpose of screening the amount under the hypothecation bond for the benefit of Ramalinga Iyer himself.” The Court agreed with the observations of the High Court and added that the same circumstance, together with the appellant’s failure to examine any person directly connected with the execution proceedings, supported an inference that the transaction recorded in Ex. V was not genuine and that the document was a sham and bogus. On this basis, the Court held that the sale in execution of the decree obtained by Anantha Iyer conveyed to the auction purchaser all the rights of the hypothecation bond executed by Ittiyavira in favour of Ramalinga Iver. The Court then turned to the final point raised by counsel, namely that the appellant was not bound by the decree in O. S. No. 59 of 1093 because he had not been made a party to it. The Court stated that, if the assignment of the properties by Ittiyavira in favour of the appellant were a genuine one, the appellant’s contention would have to be upheld. The document relied upon by the appellant is Ex. XXIX. According to the respondents, this document is a sham and bogus, having been executed by Ittiyavira for the purpose of screening the property for his own benefit. While the trial court had held that the document was genuine, the High Court had reversed that finding. The Court observed that it was necessary to keep in mind that the alleged sale was by a father in favour of his son, and that at the date of the transaction the son was not shown to possess any independent means from which to provide the consideration for the sale. The document specified that the consideration amounted to Rs. 3,000/‑, consisting of Rs. 1,500/‑ said to have been paid by the appellant to his father from time to time before the transaction, Rs. 1,000/‑ either paid or agreed to be paid by him to his mother in discharge of a
In this case, the Court observed that the consideration specified in the document consisted of three parts: a sum of Rs 1,500 that the appellant claimed to have paid his father from time to time before the transaction, a sum of Rs 1,000 that was said to have either been paid or to be paid by the appellant to his mother in discharge of a debt owed by his father to her, and a sum of Rs 500 that had already been paid to the appellant’s younger brother in discharge of a debt that the father owed to that brother. The Court agreed with the High Court that the recitals in the document gave rise to suspicion. No independent proof of these payments was produced, and the only evidence offered consisted of the appellant’s own testimony, which was an interested statement. In the proceeding under section 145 of the Criminal Procedure Code, the appellant had declared that he obtained the necessary funds for obtaining Exhibit XXIX from his mother; however, because the document itself records a requirement that he pay Rs 1,000 to his mother, the Court found that the appellant’s statement was inconsistent and appeared to be a prevarication. Moreover, the younger brother who was alleged to have loaned Rs 500 to the father was only fourteen years old at the time the document was executed, making it implausible that a child of that age could have been in a position to lend such a sum to his father. Counsel for the appellant argued that the parties actually intended that the appellant should pay the amounts of Rs 1,000 and Rs 500 to his mother and younger brother respectively in order to discharge his father’s liability to them. The Court noted that if such a contention had any substance, it should have been raised before the lower courts and not introduced for the first time at this stage. The Court further observed that, despite the execution of the document, Ittiyavira continued to be the owner of the properties described therein. Although the appellant asserted that he was in actual possession of the properties, the High Court had already pointed out that his possession was no more than that of an agent of Ittiyavira. Consequently, the Court concurred with the High Court that Exhibit XXIX was a sham and bogus document and that the transaction it purported to record was not genuine. Having rejected all the appellant’s substantive contentions, counsel then raised a new procedural point, contending that the appeal before the High Court should have been heard by a division bench of three judges, as required by section II(1) of the Travancore High Court Act, 1099. Counsel admitted that the appeal was heard by the High Court of Travancore‑Cochin, which had been created after the merger of the two states, and that the Travancore High Court Act had been repealed by Ordinance II of 1124 and re‑enacted by Act V of 1125. He further submitted that section 25 of that Act mandated that a full bench hear and determine all appeals from the decrees of the District Courts where the value of the subject‑matter exceeded Rs 5,000, and that this provision was in force at the time the suit was instituted. The Court found two reasons why this argument could not be accepted. First, the Travancore High Court had itself been abolished by the merger, and the newly constituted High Court of Travancore‑Cochin was now the proper forum. The rights of parties to prefer appeals to that High Court were initially governed by Ordinance 11 of 1124 and subsequently by Act V of 1125, statutes that came into existence after the suit had been instituted.
The counsel contended that the appellants were entitled to prefer an appeal before a tribunal that existed at the time the original suit was instituted. He argued that the law governing the right of parties to prefer an appeal was the law in force when the suit was filed, and that under that law an appeal in a suit of this nature could be heard only by a bench of three judges, not by a bench consisting of fewer judges. The Court identified two principal reasons for rejecting this contention. First, the High Court of Travancore was abolished as a result of the merger of the two States, and a new High Court of Travancore‑Cochin was created. The procedure for preferring appeals to this new High Court was initially set out in Ordinance 11 of 1124 and later in Act V of 1125. Both of these legislative instruments came into force after the suit had been instituted. Consequently, a party aggrieved by a decision rendered in a suit that was filed before the commencement of Act V of 1125 could rely only on the rights conferred by that Act. A litigant has no right to insist that a tribunal which existed at the time of filing the suit must continue to exist for the purpose of hearing the appeal. The legislature possesses full authority to repeal or replace a tribunal, and the parties did not challenge the constitutionality of the repeal of the Travancore High Court Act. Accordingly, any appellate rights that had vested under the earlier statute were extinguished by the competent legislative action. New rights were subsequently created to replace the extinguished ones, and only those newly created rights could be exercised. Even after the new rights were granted, they were later altered with respect to the requirement that certain appeals be heard by a full bench. The entitlement to a full bench under Act V of 1125 never vested in any of the parties to the present litigation, and therefore the later abrogation of that entitlement could not give rise to a valid complaint.
A second reason why the counsel’s argument could not be accepted is that an appeal merely lay to the High Court and the number of judges constituting the bench is a matter of procedure, not a substantive right. No party possesses a vested entitlement to have an appeal heard by a specified number of judges. In the present case the appeal was properly directed to the High Court, and the High Court, exercising its procedural discretion, heard and disposed of the appeal before a bench of two judges. Because the procedural determination of the size of the bench does not affect the substantive right of the appellant, the appellant’s rights were not infringed by the fact that the bench consisted of two judges rather than three. The Court therefore concluded that the appellant could not rely on the procedural composition of the bench to challenge the validity of the decision, and that the appeal had been correctly heard and decided by the two‑judge bench.
The Court observed that the appeal had been heard by a bench of two judges rather than by a bench of three judges. It noted that in certain categories of cases, for example cases that require interpretation of any provision of the Constitution, the Constitution itself stipulates that a bench of the Supreme Court hearing such a matter must consist of not fewer than five judges. The Court further explained that the existence of this constitutional requirement did not mean that the legal rule governing the size of the bench could not be altered by a body that possessed the appropriate competence to make such a change. Accordingly, the Court overruled the argument advanced by counsel for the appellant and held that the appeal had been properly heard and decided by a bench of two judges. In reaching this conclusion, the Court emphasized that the procedural composition of the bench for the present appeal was consistent with the applicable law and that no vested right of the party had been violated by the two‑judge composition. Consequently, the Court affirmed the decree issued by the High Court, ordered the dismissal of the appeal, and directed that the appellant pay costs. The final order therefore dismissed the appeal and awarded costs to the respondent.