Smt. S.uma Sunanda

1

BEFORE THE MOTOR ACCIDENTS CLAIMS TRIBUNAL-cum-

II ADDITIONAL DISTRICT AND SESSIONS JUDGE, WEST GODAVARI,

ELURU.

PRESENT: Smt. S.Uma Sunanda,

CHAIRMAN,

SPECIAL JUDGE FOR SPEEDY TRIAL OF OFFENCE UNDER

POCSO ACT, 2012

FAC:MOTOR ACCIDENTS CLAIMS TRIBUNAL-CUM-

II ADDITIONAL DISTRICT JUDGE, W.G., ELURU

Monday, this the 27 th day of March, 2023.

M.V.O.P.No.717/2017.

Between:

Maddula Yesu Babu @ Yesu @ Esubabu S/o.Maritin, Hindu, Male, aged 26 years, R/o.Dr.No.27-1-11, NRPet, Eluru, West Godavari District. … Petitioner...

And

1.Chalamalasetti Peddi Raju S/o.Nuka Raju, aged 46 years, RTC Driver, Staff No.701012, Eluru Depot R/o.Near Pothuraju temple, Chintachettuvariveedi, Eastern Street, Eluru, Driver of RTC bus bearing No.AP 28Z 1656.

2.The Managing Director, APSRTC, Main Bus Stand Complex, Vijayawada, Krishna District.

…Respondents.

This Petition coming on 23.02.2023 before me for hearing in the presence of Sri Sanku Raghu Ram, learned counsel for

Petitioner, and of Sri.K.Ramesh Babu, learned Standing counsel

for respondents No.1 and 2 and upon perusing the material

available on record and having stood over for consideration, till this day, this Tribunal made the following:

O R D E R

This petition is filed under Section 166 of M.V. Act r/w. Rule 455 of M.V. Rules claiming compensation of Rs.24,00,000/- with interest at the rate of 12% p.a. from the date of petition till the date of realization against the respondents 1 and 2 on account of injuries received by the petitioner namely Maddula Yesu Babu @

Yesu @ Esubabu in the motor vehicle accident.

2 2. The averments of the petition in brief are as follows:

(i) That the accident said to have been occurred on 22.11.2016 at about 6.10 p.m., at Fire Station Centre, Eluru when the petitioner going on the bicycle, the 1st respondent being the driver of APSRTC Bus bearing No. AP 28Z 1656 drove the same in a rash and negligent manner and dashed against the petitioner cycle, resulting which petitioner sustained grievous injuries all over his body and in the said accident one Gudimetla Veerabadra

Raju was also died. Immediately, after the accident, the petitioner was shifted to Government Hospital, Eluru and from there he was shifted to Prabha Hospital, Eluru, for better treatment and there the petitioner was treated as inpatient from 22.11.2016 to 30.12.2016 and multiple operations were conducted to the petitioner under the supervision of Dr.P.Sunil Sundeep, MS Ortho.

The S.H.O., Eluru III Town P.S., registered a case in Crime

No.243/2016 under Sections 304-A and 338 of Indian Penal Code against the 1st respondent.

(ii).It is stated that the petitioner is permanent resident of

Eluru and he is an experienced Tea Master under the employment of Gudla Ratalu, Canteen Owner of Sai Balaji Food Court, District

Hospital, Eluru and used to earn an amount of Rs.18,000/- per month and before the accident the petitioner was hale and healthy.

The entire family of the petitioner is depending upon the earnings of the petitioner. He sustained several multiple injuries and rods and plates were inserted and spent nearly an amount of

Rs.4,00,000/-towards tests, operations, treatment, medicines, attendant and transport charges. The petitioner sustained 3 permanent disability and his loss cannot be estimated in terms of money.

(iii). It is stated that the 1st respondent is the driver of the

APSRTC bus bearing No.AP 28Z 1656 having valid driving license, 2ndrespondent is the Managing Director of APSTRC/2nd respondent. It is further stated that the respondents 1 and 2 are jointly and severally liable to pay compensation to the petitioner/injured.

3.The 2nd respondent filed its written statement disputing the manner of accident. The age of the petitioner, place, date and time of the accident is disputed with a contention that the accident was occurred due to the rash and negligence of the one Gudimetla Veerabhadra Raju, who without observing the traffic signals suddenly crossed the road near Fire Station centre and dashed the petitioner, resulting which both of them fell on the road and though the 1st respondent has made all his best efforts for applying sudden breaks but he could succeed to some extent, resulting which the front type of the bus hit the motor cycle lying on the road. It is specifically disputed that the income of the petitioner claimed Rs.18,000/- per month but it is only Rs.3,000/- per month and the petitioner must prove his income by placing cogent documentary and oral evidence. The Aadhar card and ration card of the petitioner clearly discloses that the monthly income of the petitioner is less than Rs.3,000/- per month. The disability is filed by the petitioner is a fabricated and concocted document and brought into existence by the petitioner for the purpose of this petition and that the compensation and interest 4 claimed are excessive and 2nd respondent is not liable to pay any compensation.

4.Based on the aforementioned pleadings, the following issues have been settled for trial by my predecessor.

1. Whether the pleaded accident dated 22.11.2016 has occurred due to rash and negligent driving of APSRTC bus bearing registration No.AP 28Z 1656 driven by the 1 st respondent and whether the injured Maddula Yesu Babu sustained grievous injuries in the said accident?

2. Whether the crime vehicle APSRTC bus bearing registration No. AP 28Z 1656 was driven by R1,

insured with R2 as on the date of the accident?

3. To what relief?

5. In trial,the petitioner namely Maddula Yesu Babu @

Yesu @ Esubabu was examined as P.W.1. G.Ratalu, Canteen

Owner in Government Hospital Premises at Eluru was examined as

PW2. Dr.A.V.R.Mohan, the then Civil Assistant Surgeon and

Member of District Board for assessment of Orthopedic

Disabilities, who issued Ex.A9 –Disability Certificate, is examined as PW3. Dr.P.Sunil Sandeep, MS Ortho, Practicing as Orthopedic

Surgeon in Prabha Hospitals, Eluru, who treated the petitioner is examined as PW4.

6. The petitioner through PW.1 got marked Ex.A.1 attested copy of F.I.R in Crime No.243/2016 of Eluru III Town

P.S., dated 22.11.2016, Ex.A2 attested photo copy of wound certificate, Ex.A3 is attested photo copy of charge sheet, Ex.A4 is original discharge summary issued by Prabha Hospital, Ex.A5

Medical prescription issued by Prabha Hospital, Ex.A6 Original

Cross Match compatibility report dated 22.11.2016 issued by

Indian Red Cross Society, NR Pet, Eluru, Ex.A7 Original Medical 5 bill No.13999 for Rs.2,100 issued by Indian Red Cross Soceity,

Eluru, Ex.A8 is original IP Bill issued by Prabha Hospital for

Rs.1,84,598-00 along with medical bills, Ex.A9 Notarized Disability certificate District Medical Board, W.G.District, Eluru and Ex.A10 is attested copy of MVI report.

7. On behalf of 2nd respondent, 1st respondent -driver was examined as RW1 and no documents were marked on their behalf.

8. Heard the learned counsel for the petitioner and the learned Standing Counsel for respondents.

9. ISSUE No.1:-

The negligence on part of the 1st respondent driver of the

APSRTC bus bearing No.A.P 28 Z 1656 in the occurrence of the accident is to be proved as the claim is based on fault liability.

The injured in this case was met with an accident and received injuries.

10. As per the evidence of the petitioner, who is examined as

PW1 deposed that on 22.11.2016 at about 6.10 p.m., at Fire

Station Centre, Eluru when the petitioner going on his bicycle, the 1st respondent being the driver of APSRTC Bus bearing No. AP 28Z 1656 drove the same in a rash and negligent manner and dashed against his cycle, resulting which petitioner sustained grievous injuries all over his body and in the said accident one Gudimetla

Veerabadra Raju was also died. Immediately, after the accident, he was shifted to Government Hospital, Eluru and from there he was shifted to Prabha Hospital, Eluru, for better treatment and there he was treated as inpatient from 22.11.2016 to 30.12.2016 and 6 multiple operations were conducted to him under the supervision of Dr.P.Sunil Sundeep, MS Ortho.

11.PW.1 has exhibited attested copies of F.I.R., charge sheet, MVI report and discharge summary and other medical bills issued by Prabha Hospital, Eluru, under Exs.A1, A3, A4, A5 and

A8 in support of his oral testimony regarding the manner of accident and injuries received by him in the accident. The cross- examination of PW1 discloses that he denied the negligence on part of the driver of the motorcycle.

12. To disprove the manner of accident, the 1st respondent who is the driver of APSRTC Bus bearing No. AP 28Z 1656 at the time of accident was examined as RW1 who deposed that while

APSRTC Bus bearing No. AP 28Z 1656 was coming from Eluru New

Bus stand towards Old Bus stand at about 6.10 p.m., on 22.11.2016, near Fire Station, Eluru, when PW1 tried to cross the signal before coming the green light on a cycle and then one

Veerabhadraraju suddenly entered in between the bus and road margin on his motorcycle and then petitioner himself negligently crossed the signal point and dashed against the motorcycle cycle and the accident was occurred only due to the rash and negligence of the petitioner.

13. In a petition under Section 166 of the Act, negligence has to be proved by preponderance of probabilities and not beyond reasonable doubt as laid down by the Hon'ble Apex Court in Bimla

Devi and Others V. Himachal Road Transport Corporation and

others 1 .

1. (2009) 13 Supreme Court case 530.

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14. It is also held in National Insurance Limited V.

Pushpa Rana and Others 2that evidence of certified copy of criminal court, such as FIR, recovery memo and mechanical inspection report of vehicle are documents of sufficient proof to reach the conclusion that driver was negligent. Ex.A2 wound certificate corroborated by the evidence of PW.4/Doctor of Prabha

Hospitals, Eluru, who treated PW.1 also discloses the fact that the petitioner sustained fracture injuries in the motor accident. On perusal of Exs.A1 and A3 attested copies of FIR and the charge sheet it reveals that the accident was occurred due to rash and negligence of the 1st respondent and in the said accident two persons were injured and one died and it is found from Ex.A10 accident report that there were no mechanical defects in the offending vehicle at the time of accident. Further, there is no evidence to show that the 1st respondent driver is not having any valid driving license. Therefore, it is concluded that the accident was occurred due to the rash and negligent driving of the 1st respondent driver of the APSRTC bus bearing AP 28Z 1656, as a result of which the petitioner sustained injuries. As such, by probable evidence, the petitioner could prove that the accident occurred was due to the rash and negligent driving of the 1st respondent driver of the APSRTC bus bearing AP 28Z 1656 in which the petitioner sustained injuries as mentioned in Ex.A2 wound certificate. Thus, accordingly, point No.1 is answered.

15. ISSUE No.2:-

The petitioner contended that he was aged about 26 years at the time of accident and that he is Tea master under the

2. 2009 ACJ 289.

8 employment of Gudla Ratalu, Canteen Owner, Sai Balaji Food

Court, District Hospital, Eluru. The 3rd respondent disputed the age of the petitioner. Ex.A9 –Disability certificate shows that the petitioner was aged about 26 years at the time of accident and no contrary evidence was let in by the respondents. Therefore, the age of the petitioner is considered as „26‟ years at the time of accident.

16. The learned counsel for the petitioner argued that the petitioner is hale and healthy at the time of accident and used to earn not less than Rs.18,000/- per month by way of working as

Tea Master under the employment of Gudla Ratalu, Canteen

Owner, Sai Balaji Food Court, District Hospital, Eluru.

17. The learned Standing Counsel for respondent vehemently contended that the monthly earnings claimed by the petitioner as Tea Master is too excessive and the petitioner is not at all earning an amount of Rs.18,000/- per month. Further, the

Aadhar card and household card of the petitioner shows the monthly earnings of the petitioner is less than Rs.3,000/- per month. But, in order to prove the same the respondents failed to file the copies of Aadhar card and household card of the petitioner.

18. In order to prove the earnings of the petitioner, on behalf of the petitioner one Smt.G.Ratalu was examined as PW2 who is owner of the canteen, Government General Hospital, Eluru deposed that the petitioner worked as Tea Matster in her canteen at the time of accident and used to earn an amount of

Rs. 18,000/- per month (Rs.600/- on daily wage). To prove that

PW2 is the owner of that canteen, she filed bid receipts vide Ex.X1

Rs.60,000/- on 23.09.2016 and Rs.50,000/- on 25.05.2017.

During cross-examination it was elicited that there is no proof to 9 show that the petitioner worked as Tea Master in her canteen at the time of accident.

19. On perusal of the entire material on record, except the oral evidence, the petitioner has not let in any documentary evidence to prove that he is earning Rs.18,000/- per month. As such in the absence of any documentary evidence adduced by the petitioner, it cannot be concluded that the petitioner had monthly income of Rs.18,000/- by working as Tea Master. But, as per the evidence of PW2, it is established that petitioner worked under

PW2 as Tea Master in her canteen. It is settled law that when there is no proof of income, income of the injured shall be decided as monthly income by taking into consideration of prevalent minimum wages and as per notification issued vide G.O.Ms.No.85,

LET & F (Lab-II) Department dated 06.12.2006, published at

Gazette No.759 dated 20.12.2006, monthly earnings of the petitioner as Tea Maker is assessed at Rs.7580.50. Accordingly, the monthly income of the petitioner is taken at Rs.7,580/- per month. Thus, it is concluded that the age of the petitioner is determined as „26’ years and his monthly income at Rs.7,500/- as on the date of accident on 22.11.2016.

20. PW1 deposed in his evidence that on account of accident he sustained severe injuries and immediately after the accident, he was shifted to Government Hospital, Eluru and from there to Prabha Hospital, Eluru, for treatment and as he received grievous injuries, multiple operations were conducted by

Dr.P.Sunil Sundeep, MS Ortho and team of doctors and plates and rods were inserted, where she had undergone treatment from 10 22-11-2016 to 30-12-2015 and spent nearly an amount of

Rs.5,00,000/- and he needs future treatment.

21.Dr.P.Sunil Sandeep, MS Ortho, Practicing as

Orthopedic Surgeon in Prabha Hospitals, Eluru, deposed that on 22.11.2016 at about 7.30 p.m., PW1 admitted in their hospital on sustaining injuries due to the alleged Road traffic accident and on examination he found following external and internal injuries:

External injuries:(i) Swelling of left thigh; (ii) Swelling of right knee; (iii) Devolving injury of right forearm, there is extent of morbidity to the patient due to injuries sustained in road traffic accident; (iv) Swelling of left ankle.

Internal Injuries: (i) fracture of left femur (ii) fracture of right tibial plateau; (iii) fracture of medical malleonus of left ankle;

(iv) Tender injury of right fore-arm. The above injuries are grievous in nature,

Accordingly, PW4 issued wound certificate. The above injuries were treated with 1.ILN femur(left) 2.Buttress Plate tibia (right) 3.Tender repain right forearm, 4.K-wire fixation for left ankle on 22.11.2016, 25.11.2016, 04.12.2016 and 18.12.2016 in order and patient was discharged from the hospital on 30.12.2016.

Exs.A4-discharge summary, Ex.A5-Medical Prescription and

Ex.A8-Original IP Bill, are issued by him. Exs.A6 and A7 are issued by Red-cross under his authorization. PW4 further deposed that for removal of plantation approximately is up to Rs.75,000/- to Rs.1,00,000/-.

22. Therefore, the evidence of P.W.2 and from Ex.A4- discharge summary, Ex.A6-receipt issued by Indian Red Cross 11

Society, Eluru, Ex.A8 Original IP bill issued by Prabha Hosptial, for

Rs.1,84,598/- proved that the petitioner incurred nearly an amount of Rs.2,00,000/- towards medical expenditure by placing oral and documentary evidence. Hence, he is entitled to get an amount of Rs.2,00,000/- under the head of medical expenditure.

23. In Nagappa, Vs., Gurudayal Singh and others,13 wherein their lordships of our Hon'ble Apex Court observed as follows:- "In a case where injury to a victim requires periodical medical expenses, fresh award cannot be passed or previous award cannot be reviewed when the medical expenses are incurred after finalization of the compensation proceedings. Hence, only alternative is that at the time of passing of final award, tribunal/court should consider such eventuality and fix compensation accordingly."

24.In this case also, the evidence of PW2 shows that for removal of implantations to PW1, it may cost Rs.75,000/- to

Rs.1,00,000/- and on perusal of medical prescriptions and also keeping in view of the fracture injuries received by the petitioner, it can be concluded that the petitioner has to take further treatment after discharge. Therefore, the petitioner requires amount to meet future medical expenditure on account of disability sustained by him, who stated in his evidence that he needs further medical treatment in future also. Therefore, under the head of future medical expenditure, the petitioner is entitled to get Rs.1,00,000/-.

1.Civil Appeal 7989/2002), dt.3.12.2002.

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25.PW3 the then Civil Surgeon(Ortho) and also member of

District Medical Board Member, for assessment of Orthopadic

Disabilities. On 27.06.2017 petitioner appeared before Medical

Board for assessment of his disability. After verifying previous medical record and conducting physical test, his disability was assessed at 84%. Accordingly, he issued Ex.A8 –disability certificate on 27-06-2017 i.e., after six months of the accident opining that the disability is permanent in nature and the disability was due to sequal of left hand and femur of left wrist.

Further, the existing disability, the injured will have difficulty in working and also carrying weights.

26.On perusal of Ex.A9 shows that the Board has issued

Disability Certificate stating that there is disability of 84%. But, it does not contain the other details of disability or percentage of restriction of movement of right forearm and femur of left wrist.

The petitioner has not elicited from the evidence of PW3 that with the injury, the petitioner is permanently disabled in doing work, as contended by him. So, this Tribunal is of considered opinion that the petitioner has sustained 40% functional disability.

27. In this case also when the disability of the petitioner is assessed as 40% and when the age of the petitioner is considered as „26‟ years, then the multiplier that is applicable to this case is “17” as per Sarala Varma’s case. The annual income of the petitioner comes to Rs.90,000/- (Rs.7,500/- x 12).

Following the ruling of the Hon‟ble Supreme Court in

National Insurance Company Limited v. Pranay Sethi and

Others [(2017) 16 SCC 680] the petitioner is considered as self-employed considering the age of the petitioner, 40% of 13 the income has to be added towards future prospects, which comes to (Rs.7,500/- + Rs.3,000/-) Rs.10,500/-. Under the head of permanent disability, the petitioner is entitled to get

Rs.8,56,800/- (Rs.10,500 x 12 X 17X40/100) .

28. Basing on the health condition of the petitioner, it can be easily inferred that the petitioner might have incurred some amount towards transport. Immediately, after the accident, the petitioner was shifted to Government Hospital, Eluru and from there to Prabha Hospitals, Eluru and undergone treatment from 22-11-2016 to 30-12-2016 under the supervision of PW3, where he had undergone several operations. Therefore, he might have incurred some expenditure towards transport and this Tribunal by making guess work opines that she is entitled to get Rs.5,000/- under the head of transport.

29. The petitioner has been suffering from permanent disability as he received external and internal injuries, which are grievous in nature as in Ex.A2. Due to the fractures of post traumatic sequal of left hand and right lower limb, the petitioner sustained 84% disability and due to the existing disability, the injured will have difficulty in working and also carrying weights.

On perusal of Ex.A2, the petitioner received four(04) grievous injuries Therefore, under the head of pain and suffering the petitioner is entitled to get Rs. 50,000/-.

30. Due to severe injuries sustained by the petitioner, he needs extra nourishment and so, he might have taken special diet i.e., fruit juices etc., and the petitioner is not expected to preserve 14 bills. Under the head of extra nourishment, the petitioner is entitled to get Rs.30,000/-for a period of One year.

31. The petitioner might have been taking the assistance of an attendant from the time of accident as the evidence of P.Ws.

1, 3 and 4 clearly proved that he will have difficulty in working and also carrying weights. Further, due to the accident the petitioner sustained fracture injuries and undergone several operations. So, under the head of attendant charges she is entitled to get

Rs. 10,000/-.

32. The petitioner claimed compensation of Rs.24,00,000/- on account of injuries sustained by him in a motor accident which was caused due to rash and negligent driving of 1st respondent in driving the APSRTC bus bearing No. AP 28Z 1656.

33.The learned counsel for the 2nd respondent argued that the compensation claimed by the petitioner is excessive as there is a chance of recovery of health by the petitioner. By way of reply the learned counsel for the petitioner argued that certainly the petitioner is entitled to claim compensation on account of injuries sustained by him besides arguing that the petitioner sustained permanent disability who has been suffering a lot as he sustained fracture injuries and also undergone several operations.

34. Following the ruling of the Hon‟ble Supreme Court in

Municipal Corporation of Delhi Vs. Association of Victims of

Uphaar Tragedy and others 49% interest per annum can be awarded from the date of filing of the claim till the date of realization. Thus in total the petitioner is entitled to compensation 4[2012 ACJ 48 SC] 15 ofRs.12,51,000/-(Rs.2,00,000/-+Rs.1,00,000/-+Rs.8,56,000/- +Rs.5,000/-+Rs.50,000/- + Rs.30,000/- + Rs.10,000/-).

35. The liability for payment of compensation is concerned the 1st respondent is the driver of APSRTC bus bearing No.AP 28Z 1656 is responsible for the accident. The 2nd respondent owner of the said bus is vicariously liable for the act of the 1st respondent.

Thus, the respondents 1 and 2 are jointly and severally liable to pay compensation of Rs.12,51,000/- to the petitioner and the 2nd respondent is liable to deposit the said compensation amount with interest awarded at 9% per annum. Thus issue is answered.

Accordingly, issue No.2 is answered holding that the petitioner is entitled to claim compensation from the respondents 1 and 2, whose liability is joint and several.

36. ISSUE No.3:-

In the result, the petition is allowed. The respondents 1 to 2 are jointly and severally liable to pay compensation of

Rs.12,51,000/- (Rupees Twelve Lakhs Fifty One Thousand only) along with interest @ 9% per annum with proportionate costs from the date of petition till the date of deposit. The 2nd respondent company is directed to deposit the entire compensation amount of

Rs.12,51,000/- with proportionate costs together with interest within 30 days from the date of this order. On such deposit the petitioner is entitled to withdraw compensation amount of

Rs.7,00,000/- along with costs and interest and the balance compensation amount of Rs.5,51,000/- shall be kept under FDR in any nationalized bank for a period of one(01) year. Advocate fee is fixed at Rs.12,000/-.

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Decree shall be drafted after due verification of payment of

Court Fee including the court fee on excess amount if any awarded and exemption if any sought in payment of Court Fee with a mention that decree shall be executable on clearance of

Court Fee dues in case not paid within stipulated time.

Directly typed to my dictation directly on the computer by the Stenographer Grade-I, corrected and pronounced by me in Open Court, the 27th day of March, 2023.

Sd/- S. Uma Sunanda.

Special Judge for speedy trial of

Offences under POCSO Act, 2012 FAC: CHAIRMAN, MACT – cum –

II ADDITIONAL DISTRICT JUDGE

ELURU.

APPENDIX OF EVIDENCE

Witnesses Examined

For the Petitioner: For the 2 nd Respondent:

P.W.1: Maddula Yesu Babu @ Yesu RW1-Chalamasetti Peddiraju @ Esubabu

P.W.2: G.Ratalu.

P.W.3: Dr.A.V.R.Mohan.

P.W.4: Dr. P.Sunil Sandeep

For the Petitioner:

Ex.A.1: Attested copy of F.I.R in Crime No.243/2016 of Eluru III Town P.S., dated 22.11.2016.

Ex.A2: Attested copy of wound certificate.

Ex.A3: Attested copy of charge sheet.

Ex.A4: Original Discharge summary issued by Prabha Hospital, Eluru.

Ex.A5: Original Medical Prescription issued by Prabha Hospital, Eluru

Ex.A6: Original Cross Match compatibility report issued by Indian Red Cross Society, NR Pet, Eluru.

Ex.A7: Original Medical bill No.13999 for Rs.2,100/- issued by Indian Red Cross Society, NR Pet, Eluru.

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Ex.A8: Original IP Bill issued by Prabha Hospital Rs.1,84,598/- along with medical bills.

Ex.A9: Notarized Disability certificate for extent 84% issued by District Medical Board, West Godavari District, Eluru.

Ex.A10: Attested copy of MVI Report.

For the 3 rd respondent: -NIL-

I/d. S. Uma Sunanda.

Special Judge for speedy trial of

Offences under POCSO Act, 2012 FAC: CHAIRMAN, MACT – cum –

II ADDITIONAL DISTRICT JUDGE

ELURU.

APPEAL SUIT No. 110/2017 II ADJ Court, Eluru

IN THE COURT OF THE II ADDITIONAL DISTRICT JUDGE, WEST GODAVARI

ELURU.

PRESENT:- SMT.S.UMA SUNANDA,

II Additional District Judge, West Godavari, Eluru.

Wednesday, this the 25th day of January, 2023.

APPEAL SUIT No. 110/2017

Between:

Peddibhotla Sri Venkata Subrahmanyeswara Kumar, S/o. Suryanarayana, Hindu, male, aged 49 years, employee, Person in Manager, Sri Venkateswaraswamy Temple, Western Street, Eluru, W.G.Dt.

...Appellant/Petitioner

Versus

1.Malay Jawahar (died)

2.Paleti Durga, W/o. Bhaskara Rao, Hindu, female, aged 40 years, housewife, r/o. Near Brahmamgari Temple, Western Street, Eluru, W.G.Dt.

3.Relangi Dhanalakshmi, D/o. Suryanarayana, Hindu, female, aged 22 years, r/o. Near Pattabhi Ramalayam, Western Street, Eluru, W.G.Dt.

4.Indian Bank, Eluru, represented by its Manager, Powerpeta, Eluru, W.G.Dt.

5.Bank of India, Eluru, represented by its Manager, Eluru, W.G.Dt.

6.Malay Suryalakshmi, W/o. late Jawahar, Hindu, female, aged 42 years, employee in Anna Vastra Vidya Vaidyalaya Vidhana Samajam, Eluru, W.G.Dt.

… Respondents/Respondents

On appeal filed against the decree and order dated 21.07.2017 passed in

I.P.No.52/2006 on the file of the Principal Senior Civil Judge’s Court, Eluru.

Between:-

Peddibhotla Sri Venkata Subrahmanyeswara Kumar, S/o. Suryanarayana, Hindu, male, aged 49 years, employee, Person in Manager, Sri Venkateswaraswamy Temple, Western Street, Eluru, W.G.Dt.

...Appellant/Petitioner

Versus

1.Malay Jawahar (died)

2.Paleti Durga, W/o. Bhaskara Rao, Hindu, female, aged 40 years, housewife, r/o. Near Brahmamgari Temple, Western Street, Eluru, W.G.Dt.

3.Relangi Dhanalakshmi, D/o. Suryanarayana, Hindu, female, aged 22 years, r/o. Near Pattabhi Ramalayam, Western Street, Eluru, W.G.Dt.

4.Indian Bank, Eluru, represented by its Manager, Powerpeta, Eluru, W.G.Dt.

5.Bank of India, Eluru, represented by its Manager, Eluru, W.G.Dt.

APPEAL SUIT No. 110/2018 2 II ADJ Court, Eluru

6.Malay Suryalakshmi, W/o. late Jawahar, Hindu, female, aged 42 years, employee in Anna Vastra Vidya Vaidyalaya Vidhana Samajam, Eluru, W.G.Dt.

… Respondents/Respondents

This appeal is coming on 23.01.2023 for final hearing before me in the presence of Sri Nagasuri Subba Rao, Advocate for the Appellant/Petitioner and of Sri P.P.C. Joshi, Advocate for the 6th Respondent and the claim against Respondents 1 to 3 is dismissed and no claim against the Respondents 4 and 5 and the matter having stood over for consideration, till this day, this Court delivered the following:

J U D G M EN T

The Appellant is Petitioner in the Insolvency Petition who preferred this appeal being aggrieved by the order and decree passed by the learned Principal Senior

Civil Judge, Eluru in I.P.No.52/2006 dated 21.07.2017.

2. For the sake of convenience, the parties to the appeal hereinafter referred to as Petitioner and Respondents as arrayed in the trial court.

3. The germane of the petition averments filed by the Petitioner before the trial Court are as follows:- a) Before the trial Court the Petitioner filed the Insolvency Petition against the Respondents to adjudicate the deceased 1st Respondent as insolvent, to set aside the fraudulent alienations dated 07-06-2006 in respect of the Petition B Schedule property by the deceased 1st Respondent and the 2nd Respondent in favour of the 3rd

Respondent and to appoint Official Receiver to take possession and manage plaint B schedule property and for costs of the petition.

b) It is averred in the petition that the Petitioner and the deceased 1st

Respondent are employees in Sri Venkateswaraswamy Temple, Western Street, Eluru.

The deceased 1st Respondent borrowed an amount of Rs.35,000/- each from the

Respondents 4 and 5 on 11-09-2002 and the Petitioner stood as guarantor to the said transactions.

c) It is further submitted that the 4th Respondent filed suit O.S.No.1228/2004

APPEAL SUIT No. 110/2018 3 II ADJ Court, Eluru on the file of the Principal Junior Civil Judge’s Court, Eluru against the deceased 1st

Respondent and the Petitioner herein for recovery of the said debt and it was decreed on 24-02-2004. The Petitioner further submits that he came to know that the deceased 1st Respondent and the 2nd Respondent sold away the schedule property to the 3rd

Respondent on 07-06-2006 for a sale consideration of Rs.4,10,000/- with an intention to defeat the rights of his creditors. He further submits that the 5th Respondent also trying to file a suit against the deceased 1st Respondent and the Petitioner for recovery of debt and if they filed suit, the Petitioner would sustain irreparable loss and except the schedule property, the deceased 1st Respondent has no other properties and the transaction under Sale Deed dated 07-06-2006 is sham and nominal and not binding on the Petitioner. Hence, the insolvency petition.

3.The 2nd Respondent filed counter denying the allegations in the petition and submitted that there is no Creditor and Debtor relationship between the Petitioner and the deceased 1st Respondent and the 1st Respondent died prior to filing the present

Insolvency Petition. The Petitioner suppressed the real facts of death of the 1st

Respondent and filed the Insolvency Petition and the Petition is not maintainable. She further submits that she does not know about the loan transaction between the

Petitioner, the deceased 1st Respondent and the Respondents 4 and 5 and this matter will not come under the purview of Creditor IP since the deceased 1st Respondent during his lifetime, was not a debtor to the Petitioner. She further submits that as per the decree in O.S.No.1228/2004, the Petitioner and the deceased 1st Respondent are jointly and severally liable to discharge the same and hence, the act of insolvency on the part of the deceased 1st Respondent does not arise. The deceased 1st Respondent is not owner of the petition schedule property and in fact, the father of the 2nd

Respondent, namely, Malay Govardhana Rao was absolute owner of the same and he purchased the same under Registered Sale Deed dated 19-07-1961 from one

Durgampudi Sobhanadir Raju and he was in possession and enjoyment of the same till

APPEAL SUIT No. 110/2018 4 II ADJ Court, Eluru his death on 14-10-2005. She further submits that during his lifetime, her father executed a Registered Will dated 20-04-2000 in respect of the petition schedule property giving life interest to his wife Eswaramma and after her death, the 2nd

Respondent will acquire absolute right over the same and the said Will was the last Will.

In fact, Eswaramma predeceased Govardhana Rao and immediately after the death of

Govardhana Rao, the 2nd Respondent acquired absolute right over the petition schedule property and the deceased 1st Respondent did not acquire any right over the property.

Though the 1st Respondent was shown as party to the Sale Deed of the 3rd Respondent, the same will not bind the rights of the 2nd Respondent over the schedule property and in fact the 2nd Respondent sold away the property to the 3rd Respondent but on the advice of the elders, the 1st Respondent was shown as party to the said sale deed. The 3rd Respondent is bona fide purchaser and her rights over the petition schedule property would be protected. The Petitioner filed this petition with a mala fide intention to cause wrongful loss to the 3rd Respondent and to harass the 2nd Respondent and prayed to dismiss the Insolvency Petition with costs.

4. The 3rd Respondent filed counter in the same lines as that of 2nd

Respondent and further submits that she is a genuine purchaser and the Petitioner is not entitled to set aside the Sale Deed dated 07-06-2006 and prayed to dismiss the

Insolvency Petition.

5. The 5th Respondent filed counter denying the material allegations in the petition and submitted that the Petitioner along with the deceased 1st Respondent obtained loans from the 5th Respondent and stood as guarantors to each other and they never disclosed about the debts alleged to have been contracted by them from the 4th

Respondent and about the default committed by them. He further submits that the

Petitioner with a view to avoid payment of amount, filed this petition even though the 5th Respondent is not a necessary party to the petition. He further submits that the 5th

Respondent is a Nationalised Bank and Insolvency Petition against the Bank is not

APPEAL SUIT No. 110/2018 5 II ADJ Court, Eluru maintainable as per the Provincial Insolvency Act and prayed to dismiss the insolvency petition.

6.Basing on the above pleadings of both parties, the Trial Court considered the point for trial:

Whether the plea fo the Petitioner can be considered as prayed for by

declaring the 1 st Respondent as insolvent and to set aside the

Registered Sale Deed as null and void?

7.During the course of trial before the trial Court, the Petitioner himself examined as P.W.1 and got marked Exs.A1 to A3. On behalf of the Respondents, RWs 1 and 2 were examined and got marked Exs.R1 to R6.

8. The learned Principal Senior Civil Judge, Eluru after considering the pleadings and evidence of both parties, dismissed the Insolvency Petition.

9. Aggrieved by the said decree and judgment, the Appellants/Defendants 1 to 4 preferred this Appeal on the following grounds:-

i)The Decree and Order of the Trial Court is contrary to law, weight of evidence and probabilities of the case.

ii)The Trial Court ought to have thought the purpose of the Insolvency Petition filed by the Petitioner.

iii)The Trial Court ought to have observed that the evidence of the Respondents is not correct.

iv)The Trial Court ought not to have believed the evidence of the Respondents.

v) The Trial Court ought have observe and considered that the 2nd Respondent has not filed counter and not appeared before the Court and not gave evidence as she is most important witness.

vi)The Trial Court ought to have observed that the 1st Respondent cross examination, Ex.R1 Will was not produced and not marked.

vii)The Trial Court ought to have seen that R2 to R4 are sale publications and there

APPEAL SUIT No. 110/2018 6 II ADJ Court, Eluru is no such endorsement and Exs.R4 and R5 are xerox copies.

viii)The Trial Court ought to have observed the cross examination of RW-2/M.V.

Suryalakshmi.

ix)The Trial Court ought to have taken into consideration that I.P.53/2006 contents are different.

x)The Trial Court ought to have believed the evidence of the Petitioner and his intention.

xi)The Trial Court ought to have disbelieved the evidence of the Respondents.

xii)The Trial Court ought to have seen that Respondents 2, 4 and 5 not filed their counters and contest the IP and not entered into the witness box to prove their case.

xiii)The Trial Court ought to have observe the cross examination of R1.

10. Heard both sides.

The learned counsel for the Appellant/Petitioner argued that the Trial

Court ought to have allowed the Insolvency Petition basing on the evidence adduced by the Appellant/Petitioner and the disputed Sale Deed dated 07-06-2006 is a collusive transaction and prayed to allow the appeal.

11. On the other hand, the Learned Counsel for the Respondents argued that the sale trasnaction under Sale Deed dated 07-06-2006 is a genuine one and teh 3rd

Respondent is a bonafide purchaser and the deceased 1st Respondent and the

Petitioner are principal borrower and guarantor and there is creditor and debtor relationship between them and the Insolvency proceedings are not maintainable and the Trial Court dismissed the Insolvency Petition basing on law and basing on the evidence adduced by the parties and there is no ground to interfere with the judgment of the Trial Court and prayed to dismiss the Appeal.

12. Having heard the rival contentions of both side counsel and on perusal of

APPEAL SUIT No. 110/2018 7 II ADJ Court, Eluru the material on record, the points that arise for consideration are as follows:-

i) Whether there are any grounds to interfere with the order and decree passed by the Trial Court?

ii) To what relief?

13. POINT No.i:-

The main grievance of the Appellant/Petitioner is that the deceased 1st

Respondent obtained loan of Rs.35,000/- each from Respondents 4 and 5 on 11-09- 2002 and the Petitioner stood as guarantor to the said transactions and the 4th

Respondent filed suit O.S.No.1228/2004 on the file of the Principal Junior Civil Judge’s

Court, Eluru against the deceased 1st Respondent and the Petitioner for recovery of the said debt and it was decreed on 24-02-2004. His further contention is that the deceased 1st Respondent and the 2nd Respondent sold away the schedule property to the 3rd Respondent on 07-06-2006 for a sale consideration of Rs.4,10,000/- with an intention to defeat the rights of his creditors. He further submits that the 5th

Respondent also trying to file a suit against the deceased 1st Respondent and the

Petitioner for recovery of debt and if the they filed suit, the Petitioner would sustain irreparable loss and except the schedule property, the deceased 1st Respondent has no other properties and the transaction under Sale Deed dated 07-06-2006 is sham and nominal and not binding on the Petitioner.

14. On perusal of the said document i.e. Ex.A3 Registered Sale Deed dated 07-06-2006, the deceased 1st Respondent and his sister i.e. 2nd Respondent sold away the schedule property to the 3rd Respondent. According to 3rd Respondent, it is a genuine transaction and they have taken all precautions before purchasing the property i.e. paper publication inviting objections from anybody for the sale transaction before purchase of the schedule property and no objections were received with regard to the sale transaction of the schedule property. Moreover, the 2nd Respondent, who is sister of the deceased 1st Respondent, is absolute owner of the schedule property and she got

APPEAL SUIT No. 110/2018 8 II ADJ Court, Eluru the same under a Registered Will dated 20-04-2000 executed by his father, Malay

Govardhana Rao. As seen from the Will dated 20-04-2000, the said Govardhana Rao bequeathed the petition schedule property by giving life interest to his wife and vested remainder right in favour of the 2nd Respondent. The wife of Govardhana Rao predeceased him and after the death of Govardhana Rao, the 2nd Respondent became absolute owner of the petition schedule property. Moreover, the sale transaction in favour of 3rd Respondent has taken place on 07-06-2006, whereas, decree in

O.S.No.1228/2004 was passed on 24-02-2006. If there is any collusion among the

Respondents 1 to 3, the sale transaction would have taken place prior to passing decree in O.S.No.1228/2004. Admittedly, since the date of the alleged purchase, the 3rd

Respondent has been in possession and enjoyment of the petition schedule property and the said fact was admitted by the Petitioner in his cross examination. Accordingly, the transaction between the Respondents 1 to 3 under Ex.A3 Registered Sale Deed

dated 07-06-2006 is a genuine transaction and there is no material on record to set

aside the said document.

15. Admittedly, the deceased 1st Respondent is the principal borrower and the

Petitioner is guarantor to the loan transaction and the liability of the Petitioner as guarantor is co-extensive with that of the principal borrower and the liability of the deceased 1st Respondent and the Petitioner is joint and several. But, as per the evidence of PW1, he has not paid any amount towards satisfaction of the decree in

O.S.No.1228/2004 and the 4th Respondent has not initiated any EP proceedings against

the Petitioner towards realisation of the decree amount. If the Petitioner paid amount towards satisfaction of the decree, then he is entitled for recovery of the same from the estate of the deceased 1st Respondent by filing civil suit.

16. A contract of guarantee as defined under Section 126 of Indian Contract

Act, 1872 arises out of the relationship of three parties i.e. the debtor, the creditor and the guarantor. The guarantor acts as a surety to pay off the debt when the debtor fails

APPEAL SUIT No. 110/2018 9 II ADJ Court, Eluru to discharge his liabilities towards the creditors. Further, the contract of guarantee gives rise to the right of subrogation. The right of subrogation, as provided under Section 140 of the Indian Contract Act, 1872 states that once the guarantor has paid off the debt of the principal debtor, he steps into the shoes of the creditor and is possessed of all the rights of a creditor has against the principal debtor. As the Petitioner has not realised the amount under the decree and not stepped into the shoes of the deceased 1st

Respondent, hence he is not entitled to initiate Insolvency proceedings against the deceased 1st Respondent.

16. Further, the deceased 1st Respondent and Petitioner are Principal borrower and guarantor respectively and there is no creditor and debtor relationship between them and during his lifetime, the deceased 1st Respondent is not a debtor to the Petitioner and hence, the insolvency proceedings to declare the deceased 1st

Respondent as insolvent cannot be maintainable. Moreover, The Petitioner filed the

Insolvency Petition not only against the Respondents 1 to 3 and 6 but also against the

Respondents 4 and 5, which are financial corporations. Admittedly, there is a bar under

Section 8 of the Provincial Insolvency Act that the Financial Corporations are exempted from insolvency proceedings. Hence, the Insolvency Petition against the Respondents 4 and 5 is not maintainable.

17. It is further contention of the Petitioner that the 2nd Respondent, who is sister of the deceased 1st Respondent, has not filed counter and not contested the proceedings. But, as seen from the record, she filed her detailed counter. Though she did not choose to enter into the witness box, she got examined RW1, who is 3rd

Respondent and purchaser of the petition schedule property, and also examined RW2, who is her mother, and got filed Ex.R1 Will said to have executed by her father and proved her case. Hence, the above contention of the Petitioner is not tenable.

18. In view of the discussion and findings referred to above, after re-

APPEAL SUIT No. 110/2018 10 II ADJ Court, Eluru appreciation of the evidence adduced by both parties before the Trial Court, this Court is inclined to dismiss the appeal. Accordingly, the point is answered.

19. POINT No.ii:-

In the result, this appeal is dismissed without costs confirming the decree and order dated 21.07.2017 passed in I.P.No.52/2006 on the file of the Principal

Senior Civil Judge’s Court, Eluru.

Typed to my dictation by the Stenographer Gr.I, corrected and pronounced by me in open Court, this the 25th day of January, 2023.

SD/- S. UMA SUNANDA

II ADDL.DISTRICT JUDGE,

WEST GODAVARI, ELURU.

(No oral or documentary evidence is adduced on either side in this appeal).

ILD/- S.U.S

II A.D.J/Eluru

APPEAL SUIT No. 110/2017 II ADJ Court, Eluru

IN THE COURT OF THE II ADDITIONAL DISTRICT JUDGE, WEST GODAVARI

ELURU.

PRESENT:- SMT.S.UMA SUNANDA,

II Additional District Judge, West Godavari, Eluru.

Wednesday, this the 25th day of January, 2023.

APPEAL SUIT No. 110/2017

Between:

Peddibhotla Sri Venkata Subrahmanyeswara Kumar, S/o. Suryanarayana, Hindu, male, aged 49 years, employee, Person in Manager, Sri Venkateswaraswamy Temple, Western Street, Eluru, W.G.Dt.

...Appellant/Petitioner

Versus

1.Malay Jawahar (died)

2.Paleti Durga, W/o. Bhaskara Rao, Hindu, female, aged 40 years, housewife, r/o. Near Brahmamgari Temple, Western Street, Eluru, W.G.Dt.

3.Relangi Dhanalakshmi, D/o. Suryanarayana, Hindu, female, aged 22 years, r/o. Near Pattabhi Ramalayam, Western Street, Eluru, W.G.Dt.

4.Indian Bank, Eluru, represented by its Manager, Powerpeta, Eluru, W.G.Dt.

5.Bank of India, Eluru, represented by its Manager, Eluru, W.G.Dt.

6.Malay Suryalakshmi, W/o. late Jawahar, Hindu, female, aged 42 years, employee in Anna Vastra Vidya Vaidyalaya Vidhana Samajam, Eluru, W.G.Dt.

… Respondents/Respondents

On appeal filed against the decree and order dated 21.07.2017 passed in

I.P.No.52/2006 on the file of the Principal Senior Civil Judge’s Court, Eluru.

Between:-

Peddibhotla Sri Venkata Subrahmanyeswara Kumar, S/o. Suryanarayana, Hindu, male, aged 49 years, employee, Person in Manager, Sri Venkateswaraswamy Temple, Western Street, Eluru, W.G.Dt.

...Appellant/Petitioner

Versus

1.Malay Jawahar (died)

2.Paleti Durga, W/o. Bhaskara Rao, Hindu, female, aged 40 years, housewife, r/o. Near Brahmamgari Temple, Western Street, Eluru, W.G.Dt.

3.Relangi Dhanalakshmi, D/o. Suryanarayana, Hindu, female, aged 22 years, r/o. Near Pattabhi Ramalayam, Western Street, Eluru, W.G.Dt.

4.Indian Bank, Eluru, represented by its Manager, Powerpeta, Eluru, W.G.Dt.

5.Bank of India, Eluru, represented by its Manager, Eluru, W.G.Dt.

APPEAL SUIT No. 110/2018 2 II ADJ Court, Eluru

6.Malay Suryalakshmi, W/o. late Jawahar, Hindu, female, aged 42 years, employee in Anna Vastra Vidya Vaidyalaya Vidhana Samajam, Eluru, W.G.Dt.

… Respondents/Respondents

This appeal is coming on 23.01.2023 for final hearing before me in the presence of Sri Nagasuri Subba Rao, Advocate for the Appellant/Petitioner and of Sri P.P.C. Joshi, Advocate for the 6th Respondent and the claim against Respondents 1 to 3 is dismissed and no claim against the Respondents 4 and 5 and the matter having stood over for consideration, till this day, this Court delivered the following:

J U D G M EN T

The Appellant is Petitioner in the Insolvency Petition who preferred this appeal being aggrieved by the order and decree passed by the learned Principal Senior

Civil Judge, Eluru in I.P.No.52/2006 dated 21.07.2017.

2. For the sake of convenience, the parties to the appeal hereinafter referred to as Petitioner and Respondents as arrayed in the trial court.

3. The germane of the petition averments filed by the Petitioner before the trial Court are as follows:- a) Before the trial Court the Petitioner filed the Insolvency Petition against the Respondents to adjudicate the deceased 1st Respondent as insolvent, to set aside the fraudulent alienations dated 07-06-2006 in respect of the Petition B Schedule property by the deceased 1st Respondent and the 2nd Respondent in favour of the 3rd

Respondent and to appoint Official Receiver to take possession and manage plaint B schedule property and for costs of the petition.

b) It is averred in the petition that the Petitioner and the deceased 1st

Respondent are employees in Sri Venkateswaraswamy Temple, Western Street, Eluru.

The deceased 1st Respondent borrowed an amount of Rs.35,000/- each from the

Respondents 4 and 5 on 11-09-2002 and the Petitioner stood as guarantor to the said transactions.

c) It is further submitted that the 4th Respondent filed suit O.S.No.1228/2004

APPEAL SUIT No. 110/2018 3 II ADJ Court, Eluru on the file of the Principal Junior Civil Judge’s Court, Eluru against the deceased 1st

Respondent and the Petitioner herein for recovery of the said debt and it was decreed on 24-02-2004. The Petitioner further submits that he came to know that the deceased 1st Respondent and the 2nd Respondent sold away the schedule property to the 3rd

Respondent on 07-06-2006 for a sale consideration of Rs.4,10,000/- with an intention to defeat the rights of his creditors. He further submits that the 5th Respondent also trying to file a suit against the deceased 1st Respondent and the Petitioner for recovery of debt and if they filed suit, the Petitioner would sustain irreparable loss and except the schedule property, the deceased 1st Respondent has no other properties and the transaction under Sale Deed dated 07-06-2006 is sham and nominal and not binding on the Petitioner. Hence, the insolvency petition.

3.The 2nd Respondent filed counter denying the allegations in the petition and submitted that there is no Creditor and Debtor relationship between the Petitioner and the deceased 1st Respondent and the 1st Respondent died prior to filing the present

Insolvency Petition. The Petitioner suppressed the real facts of death of the 1st

Respondent and filed the Insolvency Petition and the Petition is not maintainable. She further submits that she does not know about the loan transaction between the

Petitioner, the deceased 1st Respondent and the Respondents 4 and 5 and this matter will not come under the purview of Creditor IP since the deceased 1st Respondent during his lifetime, was not a debtor to the Petitioner. She further submits that as per the decree in O.S.No.1228/2004, the Petitioner and the deceased 1st Respondent are jointly and severally liable to discharge the same and hence, the act of insolvency on the part of the deceased 1st Respondent does not arise. The deceased 1st Respondent is not owner of the petition schedule property and in fact, the father of the 2nd

Respondent, namely, Malay Govardhana Rao was absolute owner of the same and he purchased the same under Registered Sale Deed dated 19-07-1961 from one

Durgampudi Sobhanadir Raju and he was in possession and enjoyment of the same till

APPEAL SUIT No. 110/2018 4 II ADJ Court, Eluru his death on 14-10-2005. She further submits that during his lifetime, her father executed a Registered Will dated 20-04-2000 in respect of the petition schedule property giving life interest to his wife Eswaramma and after her death, the 2nd

Respondent will acquire absolute right over the same and the said Will was the last Will.

In fact, Eswaramma predeceased Govardhana Rao and immediately after the death of

Govardhana Rao, the 2nd Respondent acquired absolute right over the petition schedule property and the deceased 1st Respondent did not acquire any right over the property.

Though the 1st Respondent was shown as party to the Sale Deed of the 3rd Respondent, the same will not bind the rights of the 2nd Respondent over the schedule property and in fact the 2nd Respondent sold away the property to the 3rd Respondent but on the advice of the elders, the 1st Respondent was shown as party to the said sale deed. The 3rd Respondent is bona fide purchaser and her rights over the petition schedule property would be protected. The Petitioner filed this petition with a mala fide intention to cause wrongful loss to the 3rd Respondent and to harass the 2nd Respondent and prayed to dismiss the Insolvency Petition with costs.

4. The 3rd Respondent filed counter in the same lines as that of 2nd

Respondent and further submits that she is a genuine purchaser and the Petitioner is not entitled to set aside the Sale Deed dated 07-06-2006 and prayed to dismiss the

Insolvency Petition.

5. The 5th Respondent filed counter denying the material allegations in the petition and submitted that the Petitioner along with the deceased 1st Respondent obtained loans from the 5th Respondent and stood as guarantors to each other and they never disclosed about the debts alleged to have been contracted by them from the 4th

Respondent and about the default committed by them. He further submits that the

Petitioner with a view to avoid payment of amount, filed this petition even though the 5th Respondent is not a necessary party to the petition. He further submits that the 5th

Respondent is a Nationalised Bank and Insolvency Petition against the Bank is not

APPEAL SUIT No. 110/2018 5 II ADJ Court, Eluru maintainable as per the Provincial Insolvency Act and prayed to dismiss the insolvency petition.

6.Basing on the above pleadings of both parties, the Trial Court considered the point for trial:

Whether the plea fo the Petitioner can be considered as prayed for by

declaring the 1 st Respondent as insolvent and to set aside the

Registered Sale Deed as null and void?

7.During the course of trial before the trial Court, the Petitioner himself examined as P.W.1 and got marked Exs.A1 to A3. On behalf of the Respondents, RWs 1 and 2 were examined and got marked Exs.R1 to R6.

8. The learned Principal Senior Civil Judge, Eluru after considering the pleadings and evidence of both parties, dismissed the Insolvency Petition.

9. Aggrieved by the said decree and judgment, the Appellants/Defendants 1 to 4 preferred this Appeal on the following grounds:-

i)The Decree and Order of the Trial Court is contrary to law, weight of evidence and probabilities of the case.

ii)The Trial Court ought to have thought the purpose of the Insolvency Petition filed by the Petitioner.

iii)The Trial Court ought to have observed that the evidence of the Respondents is not correct.

iv)The Trial Court ought not to have believed the evidence of the Respondents.

v) The Trial Court ought have observe and considered that the 2nd Respondent has not filed counter and not appeared before the Court and not gave evidence as she is most important witness.

vi)The Trial Court ought to have observed that the 1st Respondent cross examination, Ex.R1 Will was not produced and not marked.

vii)The Trial Court ought to have seen that R2 to R4 are sale publications and there

APPEAL SUIT No. 110/2018 6 II ADJ Court, Eluru is no such endorsement and Exs.R4 and R5 are xerox copies.

viii)The Trial Court ought to have observed the cross examination of RW-2/M.V.

Suryalakshmi.

ix)The Trial Court ought to have taken into consideration that I.P.53/2006 contents are different.

x)The Trial Court ought to have believed the evidence of the Petitioner and his intention.

xi)The Trial Court ought to have disbelieved the evidence of the Respondents.

xii)The Trial Court ought to have seen that Respondents 2, 4 and 5 not filed their counters and contest the IP and not entered into the witness box to prove their case.

xiii)The Trial Court ought to have observe the cross examination of R1.

10. Heard both sides.

The learned counsel for the Appellant/Petitioner argued that the Trial

Court ought to have allowed the Insolvency Petition basing on the evidence adduced by the Appellant/Petitioner and the disputed Sale Deed dated 07-06-2006 is a collusive transaction and prayed to allow the appeal.

11. On the other hand, the Learned Counsel for the Respondents argued that the sale trasnaction under Sale Deed dated 07-06-2006 is a genuine one and teh 3rd

Respondent is a bonafide purchaser and the deceased 1st Respondent and the

Petitioner are principal borrower and guarantor and there is creditor and debtor relationship between them and the Insolvency proceedings are not maintainable and the Trial Court dismissed the Insolvency Petition basing on law and basing on the evidence adduced by the parties and there is no ground to interfere with the judgment of the Trial Court and prayed to dismiss the Appeal.

12. Having heard the rival contentions of both side counsel and on perusal of

APPEAL SUIT No. 110/2018 7 II ADJ Court, Eluru the material on record, the points that arise for consideration are as follows:-

i) Whether there are any grounds to interfere with the order and decree passed by the Trial Court?

ii) To what relief?

13. POINT No.i:-

The main grievance of the Appellant/Petitioner is that the deceased 1st

Respondent obtained loan of Rs.35,000/- each from Respondents 4 and 5 on 11-09- 2002 and the Petitioner stood as guarantor to the said transactions and the 4th

Respondent filed suit O.S.No.1228/2004 on the file of the Principal Junior Civil Judge’s

Court, Eluru against the deceased 1st Respondent and the Petitioner for recovery of the said debt and it was decreed on 24-02-2004. His further contention is that the deceased 1st Respondent and the 2nd Respondent sold away the schedule property to the 3rd Respondent on 07-06-2006 for a sale consideration of Rs.4,10,000/- with an intention to defeat the rights of his creditors. He further submits that the 5th

Respondent also trying to file a suit against the deceased 1st Respondent and the

Petitioner for recovery of debt and if the they filed suit, the Petitioner would sustain irreparable loss and except the schedule property, the deceased 1st Respondent has no other properties and the transaction under Sale Deed dated 07-06-2006 is sham and nominal and not binding on the Petitioner.

14. On perusal of the said document i.e. Ex.A3 Registered Sale Deed dated 07-06-2006, the deceased 1st Respondent and his sister i.e. 2nd Respondent sold away the schedule property to the 3rd Respondent. According to 3rd Respondent, it is a genuine transaction and they have taken all precautions before purchasing the property i.e. paper publication inviting objections from anybody for the sale transaction before purchase of the schedule property and no objections were received with regard to the sale transaction of the schedule property. Moreover, the 2nd Respondent, who is sister of the deceased 1st Respondent, is absolute owner of the schedule property and she got

APPEAL SUIT No. 110/2018 8 II ADJ Court, Eluru the same under a Registered Will dated 20-04-2000 executed by his father, Malay

Govardhana Rao. As seen from the Will dated 20-04-2000, the said Govardhana Rao bequeathed the petition schedule property by giving life interest to his wife and vested remainder right in favour of the 2nd Respondent. The wife of Govardhana Rao predeceased him and after the death of Govardhana Rao, the 2nd Respondent became absolute owner of the petition schedule property. Moreover, the sale transaction in favour of 3rd Respondent has taken place on 07-06-2006, whereas, decree in

O.S.No.1228/2004 was passed on 24-02-2006. If there is any collusion among the

Respondents 1 to 3, the sale transaction would have taken place prior to passing decree in O.S.No.1228/2004. Admittedly, since the date of the alleged purchase, the 3rd

Respondent has been in possession and enjoyment of the petition schedule property and the said fact was admitted by the Petitioner in his cross examination. Accordingly, the transaction between the Respondents 1 to 3 under Ex.A3 Registered Sale Deed

dated 07-06-2006 is a genuine transaction and there is no material on record to set

aside the said document.

15. Admittedly, the deceased 1st Respondent is the principal borrower and the

Petitioner is guarantor to the loan transaction and the liability of the Petitioner as guarantor is co-extensive with that of the principal borrower and the liability of the deceased 1st Respondent and the Petitioner is joint and several. But, as per the evidence of PW1, he has not paid any amount towards satisfaction of the decree in

O.S.No.1228/2004 and the 4th Respondent has not initiated any EP proceedings against

the Petitioner towards realisation of the decree amount. If the Petitioner paid amount towards satisfaction of the decree, then he is entitled for recovery of the same from the estate of the deceased 1st Respondent by filing civil suit.

16. A contract of guarantee as defined under Section 126 of Indian Contract

Act, 1872 arises out of the relationship of three parties i.e. the debtor, the creditor and the guarantor. The guarantor acts as a surety to pay off the debt when the debtor fails

APPEAL SUIT No. 110/2018 9 II ADJ Court, Eluru to discharge his liabilities towards the creditors. Further, the contract of guarantee gives rise to the right of subrogation. The right of subrogation, as provided under Section 140 of the Indian Contract Act, 1872 states that once the guarantor has paid off the debt of the principal debtor, he steps into the shoes of the creditor and is possessed of all the rights of a creditor has against the principal debtor. As the Petitioner has not realised the amount under the decree and not stepped into the shoes of the deceased 1st

Respondent, hence he is not entitled to initiate Insolvency proceedings against the deceased 1st Respondent.

16. Further, the deceased 1st Respondent and Petitioner are Principal borrower and guarantor respectively and there is no creditor and debtor relationship between them and during his lifetime, the deceased 1st Respondent is not a debtor to the Petitioner and hence, the insolvency proceedings to declare the deceased 1st

Respondent as insolvent cannot be maintainable. Moreover, The Petitioner filed the

Insolvency Petition not only against the Respondents 1 to 3 and 6 but also against the

Respondents 4 and 5, which are financial corporations. Admittedly, there is a bar under

Section 8 of the Provincial Insolvency Act that the Financial Corporations are exempted from insolvency proceedings. Hence, the Insolvency Petition against the Respondents 4 and 5 is not maintainable.

17. It is further contention of the Petitioner that the 2nd Respondent, who is sister of the deceased 1st Respondent, has not filed counter and not contested the proceedings. But, as seen from the record, she filed her detailed counter. Though she did not choose to enter into the witness box, she got examined RW1, who is 3rd

Respondent and purchaser of the petition schedule property, and also examined RW2, who is her mother, and got filed Ex.R1 Will said to have executed by her father and proved her case. Hence, the above contention of the Petitioner is not tenable.

18. In view of the discussion and findings referred to above, after re-

APPEAL SUIT No. 110/2018 10 II ADJ Court, Eluru appreciation of the evidence adduced by both parties before the Trial Court, this Court is inclined to dismiss the appeal. Accordingly, the point is answered.

19. POINT No.ii:-

In the result, this appeal is dismissed without costs confirming the decree and order dated 21.07.2017 passed in I.P.No.52/2006 on the file of the Principal

Senior Civil Judge’s Court, Eluru.

Typed to my dictation by the Stenographer Gr.I, corrected and pronounced by me in open Court, this the 25th day of January, 2023.

SD/- S. UMA SUNANDA

II ADDL.DISTRICT JUDGE,

WEST GODAVARI, ELURU.

(No oral or documentary evidence is adduced on either side in this appeal).

ILD/- S.U.S

II A.D.J/Eluru

IN THE COURT OF THE II ADDL. DISTRICT COURT: ELURU DISTRICT,

ELURU

Present: Smt. S.Uma Sunanda., Spl. Court for trial of cases under the POCSO Act, 2012, Eluru FAC. II Additional District Judge, Eluru District, Eluru. Tuesday, this the 28th day of March, 2023.

E.P.No.351/2019 in AC No.406/2018.

Between:

M/s Shriram City Union Finance Ltd., Tadepalligudem.

..Petitioner/D.Hr.

And.

1.Gangiredla Raghavendra Prasad.

2.Mallareddy Ravi Sekhar.

..Respondents/J.Drs.

The Decree Holder prays to issue Or.21, Rule.43 notice and attach the EP schedule property of J.Dr.1 and 2 and sell for realization of the decree amount.

This petition coming on this day for disposal before me, in the presence of Sri K.V.S.N.R.Gopal, Advocate for the Petitioner/D.Hr and J.Dr.Nos.1 and 2 remained exparte, and having stood over for consideration till this day, this Court made the following:-

J U D G M E N T

Counsel for D.Hr filed not press memo. Heard D.Hr. Memo recorded.

Hence, EP is dismissed as not pressed.

Pronounced by me in open court, this the 28 th day of March, 2023.

Sd/- S. Uma Sunanda.

Spl. Court for trial of cases under the POCSO Act,12, Eluru

FAC. II ADDITIONAL DISTRICT JUDGE,

ELURU DISTRICT, ELURU.

APPENDIX OF EVIDENCE

No oral or documentary evidence is adduced on either side.

Sd/- S. Uma Sunanda.

Spl. Court for trial of cases under the POCSO Act,12, Eluru.

FAC. II ADJ, ELURU.

IN THE COURT OF THE II ADDL. DISTRICT COURT: ELURU DISTRICT,

ELURU

Present: Smt. S.Uma Sunanda., Spl. Court for trial of cases under the POCSO Act, 12 ., Eluru FAC. II Additional District Judge, Eluru District, Eluru. Monday, this the 27th day of March, 2023.

E.P.No.250/2019 in ARC No.1/2015.

Between:

M/s Shriram City Union Finance Ltd., Eluru.

..Petitioner/D.Hr.

And.

1.Rentapalli Sundar Shankar.

2.Upasi Sarala.

3.Nagella Syam Prasad Babu.

..Respondents/J.Drs.

The Decree Holder prays to pass orders attachment of salary of J.Dr.2 and 3 through their salary disbursing officer for realization of the award amount.

This petition coming on this day for disposal before me, in the presence of Sri K.V.S.N.R.Gopal, Advocate for the Petitioner/D.Hr and J.Dr.No.3 remained exparte, and having stood over for consideration till this day, this Court made the following:-

J U D G M E N T

R.48 attachment against J.Dr.2 is executed. Attachment effected on 23.02.2023. Heard. Hence, EP is closed.

Pronounced by me in open court, this the 27 th day of March, 2023.

Sd/- S. Uma Sunanda.

Spl. Court for trial of cases under the POCSO Act,12, Eluru

FAC. II ADDITIONAL DISTRICT JUDGE,

ELURU DISTRICT, ELURU.

APPENDIX OF EVIDENCE

No oral or documentary evidence is adduced on either side.

Sd/- S. Uma Sunanda.

Spl. Court for trial of cases under the POCSO Act,12, Eluru.

FAC. II ADJ, ELURU.