when there is no appeal against the declaration of mother as insolvent, the mere appeal on the declaration of gift deed as null and void not maintainable by the daughter as she obtained it while money suit is pending and as she failed to prove her pasupukumkuma theory - hence the lower courts committed no error indeclaring the gift deed as null and void in insolvency proceding under sec.9 of insolvency act.


                          C.M.S.A.No.31 of 2012

Date: 01-10-2012

Mallipudi Sunie Anila Kumari
... Appellant/


Juttiga Venkayamma
and another                                          
... Respondents
                                                       Respondents 1 and 2                               



C.M.S.A.No.31 of 2012

The 2nd respondent in I.P.No.52 of 2004 on the
file of the Principal Senior Civil Judge, Kovvur,
West Godavari District, preferred the present appeal assailing the judgment of the learned Principal District Judge, West Godavari at Eluru, in A.S.No.30 of 2009.  The 1st respondent herein filed I.P.No.52 of 2004 under Section 9 of the Provincial Insolvency Act, 1920 (the Insolvency Act, for short) to declare the 2nd respondent herein as an insolvent.  The 1st respondent herein also sought to declare the gift deed dated 08-9-2004 executed by the 2nd respondent herein in favour of the
appellant herein as null and void.  Through orders
dated 10-12-2008, I.P.No.52 of 2004 was allowed. 
The 1st respondent in I.P.No.52 of 2004, who is the
2nd respondent herein, was declared as an insolvent. 
The gift deed dated 08-9-2004, which was exhibited as Ex.A-2, was declared to be null and void.  Questioning the same, the 2nd respondent before the Insolvency Court preferred A.S.No.30 of 2009 unsuccessfully.  Hence the present appeal.     

2. For convenience, I shall refer the parties as they are arrayed in I.P.No.52 of 2004.  

3. The 1st respondent is the mother of the
2nd respondent.  The 1st respondent contracted a debt to a tune of Rs.80,000/- on 10-6-1999 from the petitioner vide Ex.A-1 pronote.  The petitioner filed O.S.No.82 of 2002 on the file of the Principal Senior Civil Judge’s Court, Kovvur.  The suit was decreed on 26-10-2006 vide Ex.A-3 certified copy of the judgment and decree. While the suit was pending, the 1st respondent executed Ex.A-2 settlement deed in favour of her daughter-2ndrespondent on 08-9-2004.  The petitioner contended that the execution of the settlement deed was sham and nominal and was brought out to defeat the decree that was likely to be passed against the 1st respondent. 

4. The case of the respondents is that the property covered by Ex.A-2 was gifted to the 2nd respondent by the 1st respondent towards her pasupu-kumkuma at the time of the marriage of the 2nd respondent in 1993 and that the possession was delivered to the 2nd respondent on
30-5-1993.  It is their further case that Ex.A-2 settlement deed was executed to regularise the gift that was given to the 2nd respondent by her mother-1st respondent as
a marriage gift. 

5. Smt. N.Anjana Devi, learned counsel for the creditor-petitioner, contended that the alleged gift under Ex.A-2 is nominal and that the same is evident from the fact that the 2nd respondent never took possession of the property covered by the gift.  She submitted that the
1st respondent never questioned her adjudication as an insolvent by the Insolvency Court.  She also pointed out that it is the 2nd respondent who is questioning the order relating to holding Ex.A-2 as null and void and that the 2nd respondent has no proof that the gift was valid.  

6. Under Section 9 of the Insolvency Act, a creditor can institute an insolvency petition if the debtor committed acts of insolvency within 3 months before the date of presentation of the petition vide Section 9(c) of the Insolvency Act.  The gift deed under Ex.A-2 is dated
08-9-2004.  The insolvency petition was filed on
30-11-2004 within 3 months from the date of the gift deed.  I therefore accept the contention of the learned counsel for the petitioner that the insolvency petition was filed by the creditor well within time.

7. The major question however is whether Ex.A-2 settlement deed is null and void or not.  Sri Vinod Singh, learned counsel for the 2nd respondent, placed reliance upon Bachu Srinivasa Rao v. Yerramsetti Saraswatamma[1] and contended that the 1st respondent does not deserve to be declared as an insolvent where there is no proof regarding the intention of the
1st respondent to commit acts of insolvency.  In the cited case, a learned single Judge of this Court observed:
“18. From a perusal of the evidence on record, there is no tangible evidence to the effect that the debtor made transfer of her property or of any part thereof, with intention to defeat or delay his creditors. 

19. The courts below, have not framed any issue with regard to the averment of the petitioner with regard to intention of the debtor with regard to delay and defraud the creditors and in order to invoke the said clause, the ingredients have to be proved.  Therefore, when the averments of the petitioner are not proved, even if there is transfer of property by the debtor, he cannot be declared insolvent.  On this count alone, the impugned judgments of both the courts below are liable to be set aside.”
8. In the present case, the question is not
whether the 1st respondent committed acts of insolvency.  The 1st respondent did not prefer any appeal.  The second appeal is by the 2nd respondent questioning the order of the trial Court as well as the judgment of the appellate Court that Ex.A-2 settlement deed is null and void.   
9. In Gandevalla Jayaram Reddy v. Mokkala Padmavathamma[2], a question came up for consideration regarding the gift of immovable property by way of pasupu-kumkuma to a daughter at the time of the marriage.  The Full Bench held that oral gift of immovable property is not permissible and that such
a gift is liable to be through an instrument duly stamped and registered.  In that view of the situation, neither the 1st respondent nor the 2nd respondent can contend that the property covered by Ex.A-2 was gifted to the
2nd respondent way back in 1993 and that Ex.A-2 was only a regularisation of the gift that was given in favour of the 2nd respondent.
10. Further, the learned counsel for the petitioner pointed out that no evidence has been let in by the
2nd respondent to show that she has been in possession of the property from 1993.  Thus, the very claim of the respondents that the 1st respondent gifted the property covered by Ex.A-2 to the 2nd respondent in 1993 has not been proved.  The gift is to be considered to have been executed in 2004 for the first time.  

11. Where the very suit in O.S.No.82 of 2002
was pending by the date of the gift, the gift is hit by Section 9(c) of the Insolvency Act.  The trial Court and the appellate Court consequently were perfectly justified in holding that the 1st respondent committed acts of insolvency and that the gift was null and void. 
I therefore see no merits in this second appeal.  This second appeal consequently is dismissed.  No costs.  

                                                     K.G.SHANKAR, J.
01st October, 2012.











C.M.S.A.No.31 of 2012



01st October, 2012.


[1] 2011 (4) ALT 740
[2] 2001 (5) ALD 402 (FB)


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