1958 (9) TMI 48 - HC - Companies Law

Issues Involved:
1. Ownership of Dakota aircraft VT-AZV at the time of receiver appointment.
2. Whether the transfer of Dakota aircraft VT-AZV was a sham or fraudulent transaction.
3. Whether the plaintiff took all steps in execution of the decree.
4. Maintainability of the suit if the plaintiff fails to establish facts.
5. Necessity of defendant No. 2 as a party to the suit.
6. Reliefs the plaintiff is entitled to.

Detailed Analysis:

1. Ownership of Dakota aircraft VT-AZV at the time of receiver appointment:
The court examined whether defendant No. 2 became the owner of the aircraft VT-AZV at the time the receiver was appointed in suit No. 4676 of 1950. The evidence established that on July 16, 1950, the defendant No. 1 and defendant No. 2 entered into a financing agreement and a partnership agreement. The financing agreement provided that the aircraft would be employed by defendant No. 2 for carrying passengers and air freight, and the net profits would be shared equally. The court found that the defendant No. 2 was a secured creditor and the mortgagee in possession of the aircraft. The financing agreement created a mortgage of the aircraft in favor of defendant No. 2, transferring the ownership and general property in the aircraft to defendant No. 2, subject to defeasance on redemption. Therefore, the court concluded that defendant No. 2 was the owner of the aircraft as contemplated by the terms of settlement dated March 2, 1951.

2. Whether the transfer of Dakota aircraft VT-AZV was a sham or fraudulent transaction:
The plaintiff alleged that the transfer of the aircraft by defendant No. 1 to defendant No. 2 was a sham or fraudulent transaction. The court found that large sums of money were advanced by defendant No. 2 under the agreements dated July 16, 1950, and that the defendant No. 2 procured a transfer of the aircraft in part satisfaction of the outstanding debt. The court held that the transfer was not a fraudulent or sham transfer. Additionally, the court found that the aircraft was sold by defendant No. 1 to defendant No. 2 for Rs. 1,20,000 in November 1950, and the sale was not a fraudulent or sham transaction.

3. Whether the plaintiff took all steps in execution of the decree:
The court examined whether the plaintiff had taken all steps in execution of the decree as provided in the consent order dated March 14, 1951. The court found that the plaintiff had not taken all steps in execution or otherwise to get the pledged shares sold. Therefore, the condition precedent to the liability of defendant No. 2 under the order dated March 14, 1951, had not been fulfilled.

4. Maintainability of the suit if the plaintiff fails to establish facts:
The court considered whether the suit was maintainable if the plaintiff failed to establish any of the facts mentioned in issues Nos. 1, 2, and 3. The court held that the terms of settlement required the plaintiff to institute a suit within the specified time to claim the valuable rights conferred by the settlement. The suit was not premature, and the plaintiff was entitled to establish the facts enumerated in the settlement. However, since the plaintiff failed to establish the facts, he was not entitled to any relief.

5. Necessity of defendant No. 2 as a party to the suit:
The court did not specifically address this issue in detail, but it is implied that defendant No. 2 was a necessary party to determine the ownership and the validity of the transfer of the aircraft.

6. Reliefs the plaintiff is entitled to:
The court concluded that the plaintiff was not entitled to any relief as he failed to establish the necessary facts. The decree for dismissal of the suit was affirmed, and the finding that defendant No. 2 was not the owner of the aircraft on December 24, 1950, was set aside.

Conclusion:
The appeal was dismissed, and the cross-objection by defendant No. 2 was allowed to the extent that the finding of the trial judge that defendant No. 2 was not the owner of the aircraft on December 24, 1950, was set aside. Each party was directed to bear its own costs of the appeal and cross-objection. The direction of the trial judge regarding the costs of the trial and pro interesse suo proceedings in suit No. 4676 of 1950 was affirmed.

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