APHC010407002014 IN THE HIGH COURT OF ANDHRA PRADESH Friday, the ninth day of May, two thousand and twenty five The Honourable Ms. Civil Miscellaneous Second Appeal Between: Poka Venkatadri (Died and Tanneeru Narayanamma and Counsel for the appellant 1. M. R. S. Srinivas Counsel for the respondent 1. Nimmagadda Satyanarayana 2. Nimmagadda Revathi The Court made the following IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) the ninth day of May, two thousand and twenty five Present The Honourable Ms. Justice B.S. Bhanumathi Civil Miscellaneous Second Appeal No.18 of 2014 Died) Per LRs and others ... Tanneeru Narayanamma and others ...Respondents ppellants: Srinivas espondents: Nimmagadda Satyanarayana Nimmagadda Revathi The Court made the following: IN THE HIGH COURT OF ANDHRA PRADESH [3311] the ninth day of May, two thousand and twenty five Bhanumathi 2014 ...Appellants Respondents 2 BSB, J C.M.S.A.No.18 of 2014 JUDGMENT: The Civil Miscellaneous Second Appeal is filed under section 75 of the Provincial Insolvency Act, 1920 (in short “the P.I. Act”) against the judgment and decree dated 07.12.2012 allowing A.S.No. 174 of 2009 on the file of the Court of Principal District Judge, Ongole, filed against the judgment and decree dated 30.05.2009 allowing the insolvency petition in I.P. No.6 of 1990 on the file of the Court of Senior Civil Judge, Markapur, filed under Section 9 of the P.I. Act. 2. The I.P. was filed by seven (7) creditors against one debtor / R1 and four (4) other respondents (R2 to R5) to adjudge R1 as an insolvent, to award costs and to pass such other order in the interest of justice. Pending the adjudication of the petition, some of the petitioners (P2, P3, P4, and P6) died. P8 to P11 were added as the legal representatives of the deceased P2. P12 to P18 were added as the legal representatives of the deceased P3. P19 to P23 were added as the legal representatives of the deceased P4. It seems that no steps were taken after death of the P6 to add his legal representatives. Pending the adjudication of the petition, R2 died. R5 to R10 were added as his legal representatives. Then, his wife / R6 died pending the adjudication of the petition. Her legal representatives were on the record. R4 remained ex parte. 3. The appeal against the order in the I.P. was filed by R3, R5 and R7 to R10 therein. R1 to R23 in the first appeal are P 1 to P23 (2, 3, 4, and 6 died) in the I.P. Since R1 / P1 died, his son is on record as R24. R25 to R28 in the first appeal are R1, R2 (died), R4, and R6 (died) in the I.P. In the judgment in the first appeal, it was noted that the appeal against R1 was abated, but R24 is his son. In the judgment in the first appeal, it was noted that R21 also died, no other steps were recorded. 3 BSB, J C.M.S.A.No.18 of 2014 The first appeal against R11 was dismissed for default in payment of batta and heard ex parte against R25 and R27 (co-respondents in the I.P. with the appellants). 4. This second appeal was filed by R7 to R19 and R21 to R24 against seventeen (17) respondents. As the appellant No. 1 died pending this appeal, his legal representatives were added as the appellants Nos. 18 to 21. R1 to R6 herein are the appellants Nos.1 to 6; R7 to R13 herein are R1 to R6 and R20, and R14 to R17 are R25 to R28 before the first appellate Court. R18 and R19 were added here as the legal representatives of R2, who died pending this appeal. 5. This case has a chequered history. Initially, the I.P. was allowed on 25.03.1995 adjudging R1 as an insolvent and setting aside the sale deeds and the gift deed. Against this order, an appeal in A.S.No.112 of 1995 was filed before the Court of II Additional District and Sessions Judge, Ongole. The appeal was dismissed on 22.06.2006. Challenging the same, a second appeal in C.M.S.A. No.61 of 2006 was filed before the then High Court of Andhra Pradesh. As it was contended that the appeal was allowed after setting the respondents ex parte as their advocate reported no instructions, and the other challenges were raised, on 28.12.2006, the High Court allowed the second appeal only insofar as it relates to the sales covered by Exs. A3 and A4 on condition of depositing Rs. 10,000/- by the appellants within the stipulated time and on such deposit, the trial Court shall proceed to dispose of the matter, confining its adjudication to the validity of the sales under Exs. A3 and A4. It was further ordered that the amount shall be proportionately distributed among the creditors and that in case the sales under Exs. A3 and A4 are upheld, the appellants shall be entitled to have a charge over the other properties of R24. Thus, the second 4 BSB, J C.M.S.A.No.18 of 2014 order dated 30.05.2009 of the insolvency Court in I.P.No.6 of 1990 and the second judgment dated 07.12.2012 of the first appellate Court in A.S.No. 174 of 2009 are the subjects of this appeal. 6. The parties are arrayed in the same manner as before the insolvency Court for the purpose of convenience. The case of the petitioners briefly stated is as follows: a. R1 borrowed different amounts on different dates from different petitioners and executed promissory notes undertaking to repay the amount with interest as shown below- S.No. Creditor Date Amount (in Rs.) Rate of interest 1. Petitioner No.1 01.12.1985 900/- 18% p.a. 2. Petitioner No.1 28.05.1989 3,000/- 24% p.a. 3. Petitioner No.2 05.10.1987 650/- 18% p.a. 4. Patti Chinna Kotaiah (Transferred to Petitioner No.3 for consideration) 15.02.1988 11.06.1989 4,000/- 24% p.a. 5. Petitioner No.4 06.08.1989 2,900/- 24% p.a. 6. Petitioner No.5 30.08.1989 500/- 18% p.a. 7. Petitioner No.6 17.09.1989 600/- 24% p.a. 8. Petitioner No.8 16.12.1986 3,000/- 18% p.a. On 30.11.1988, by making part payment of Rs.50/- to P1, R1 made an endorsement of the part payment on the back side of the promissory note dated 01.12.1985. R1 executed a renewal promissory note on 02.12.1989 for an amount of Rs.4,600/- in favour of P7 without making any payment. He failed to pay any amount outstanding as due to any 5 BSB, J C.M.S.A.No.18 of 2014 petitioner. (There are the same mistakes in the narration of facts in the order of the trial Court and the judgment of the first appellate Court.) b. R2 is the son of the junior paternal uncle of R1. R3 is the daughter-in-law of R2. R4 is the wife of R1. Conspiring with the R2 to R4, to defeat the claims of the creditors, R1 executed colourable deeds in their favour, without actually parting with them. Thus, he executed a sale deed dated 21.03.1990 in favour of R2, registered vide document No. 95 of 1990 of Sub-Registrar’s office, Markapur, and on the same day another sale deed in favour of R3, registered vide document No. 96 of 1990 of the same office, both regarding substantial part of his properties. On the same day, he executed a gift deed in favour of R4, registered vide document No. 97 of 1990 of the same office, regarding his some other properties. He retained with him a vacant site and a hayrick yard. The very old house and the vacant site retained by him fetch not more than Rs.5,000/- and are not sufficient to discharge the liabilities to the petitioners. In the sale deeds, there is a reference of discharge of a false mortgage to Potti Venkata Subbaiah with the amount of the sale consideration. The mortgage deed was brought into existence to claim a preferential secured debt to defeat the debts of the petitioners. Thus, R1 committed acts of insolvency. Unless the sale deeds and the gift deed are set aside, it is not possible to realise the debts due by R1 to the petitioners. 7. R1 filed a counter averring his case briefly stated as follows: a. Besides the debts due to the petitioners, this respondent is indebted to the others whose debts are given in the schedule annexed to the counter to a tune of Rs.1,19,675/-. 6 BSB, J C.M.S.A.No.18 of 2014 S.No. Name of the creditor Amount 1. Tanneeru Chennaiah Thanneerupalle Rs.10000=00 2. Garni Bangaraiah -do- Rs.6500=00 3. Thanneru Bodaiah -do- 4975=00 4. Challa Velugondaiah -do- 1000=00 5. Challa Akkaiah -do- 1200=00 6. Thanneru Yellamanda -do- 6000=00 7. Challa Pitchaiah -do- 1600=00 8. Challa Pedda Subbarayudu -do- 1000=00 9. Challa China Subbarayudu -do- 5000=00 10. Putta Kotaiah Venkatapuram 2000=00 11. Thota Venkaiah Venkatapuram 3000=00 12. Batchu Chandra Sekharam Pothalapadu 7000=00 13. Gorantla Ramaiah Pedda Yachavaram 5000=00 14. Thanneeru Velugondaiah Pedda Yachavaram 1200=00 15. Thanneru Peddaiah -do- 200=00 16. Thanneru Venkateswarlu -do- 300=00 17. Dudekula Pedda Beebulu -do- 400=00 18. Marathu Yogaiah -do- 700=00 19. Potti Bala Subbaiah Bodapadu 1000=00 20. Chinna Ramaiah Bodapadu 1000=00 21. Dugempudi Laxmaiah Rajupalem 1200=00 22. Grandhe Mallikarjunarao Markapur 300=00 23. Vallapuneni Laxmaiah Pedda Yachavaram 500=00 24. Kandepu Mallaiah Markapur 11000=00 25. Cheemakurthi Rama Rao Markapur 2000=00 26. Cheemakurthi Ramulu Mannemvaripalle 3000=00 27. Rayalaseema Grammena Bank, Gajjalakonda 8000=00 28. Gorantla Velugondaiah Pedda Yachavaram 7000=00 29. Tangutur Subbaiah Markapur 600=00 30. Kongaleeti Joseph Pedda Yachavaram 6000=00 31. Thanneru Venkateswarlu Thannerupalle 10000=00 32. Vulavala Sivaiah Mallampeta 10000=00 Total 1,19,675=00 b. Tanneeru Kodanda Ramulu, the son of R2 and the husband of R3 and later impeaded as R5, contested for the post of Sarpanch of the Grampanchayat, Pedda Yachavaram three years ago. At his request, this respondent financially helped him by borrowing from others. He won 7 BSB, J C.M.S.A.No.18 of 2014 the election. To get back the money, this respondent became his follower and was under his control. As the creditors were compelling to discharge the loans, R5 drove this respondent into a well-laid trap to execute the sale deeds in favour of his father and his wife without paying the consideration amount nor paying any amount to discharge the mortgage loan, pretending as helping this respondent to settle the issues with the creditors. The attestors of the sale deeds are his henchmen. The mortgage debt was settled at and redeemed by paying Rs.12,000/-, out of which Rs.6,000/- was paid by K. Joseph and Rs.6,000/- was paid by Tanneeru Chennaiah S/o. Kotaiah of Thanneerupalle and the cancelled mortgage deed was kept with K. Joseph as he and R5 conspired to defraud this respondent. Under the guise of the sale deeds, R5 took possession of the land and making unlawful gain by raising crops. The sale deeds executed in favour of R2 and R3 are liable to be set aside and those landed properties be sold in public auction and the sale proceeds be distributed to all the creditors. He prayed to adjudge him as insolvent and vest the properties under those sale deeds on a receiver appointed by Court. c. Since this respondent used the stridhana jewels of his wife / R4 for his personal purpose and for the election of R5, out of love and affection for her, he executed the gift deed in her favour transferring Ac.0.83 cents in S.No.221/1 of Yachavaram village and put her in possession of it. 8. R2 and R3 filed a counter averring their case briefly stated as follows: The petition is unjust and not maintainable. It is not true that the recitals in the sale deeds are false and these documents are bogus, 8 BSB, J C.M.S.A.No.18 of 2014 colourable and not real transactions and that they were not acted upon and were intended to defeat the debts due to the petitioners. It is false that the debt under mortgage to Potti Venkata Subbaiah is not true and that it was created to defeat the claims of the petitioners. R1, joining with the petitioners, created the debts allegedly due to the petitioners. These respondents have no knowledge of these debts. These debts were not there when the lands were purchased from R1. These respondents are bona fide purchasers having purchased the lands for valuable consideration and discharged the mortgage debt. Prayed to dismiss the petition. 9. R4 filed a counter adopting the counter filed by her husband, R1, and further stating that this respondent sold away this property to Tanneeru Galaiah on 15.02.1990 under a registered sale deed for valuble consideration of Rs.2100/- to discharge her debt due to P. Pedda Velugondaiah and put the purchaser in possession of it and praying to exclude the land sold to him and award costs. 10. Initially, P.Ws. 1 to 4 and Exs.A1 to A12 were marked on behalf of the petitioners. On behalf of the respondents, R1 was examined as R.W.1. After remand of the matter, additional evidence was adduced by both the parties. The petitioners examined P.Ws. 5 to 7 and filed Exs. A12 and A13. The respondents examined R.Ws. 2 to 7 and filed Exs. B1 and B7 and Exs. X1 to X8. For Petitioners For Respondents P.W.1 J.Subbaiah R.W.1 Tanner Muslaiah P.W.2 Vadlamudi Kasaiah R.W.2 T.Kodanda Ramulu P.W.3 Arepalli Venkata Rangam R.W.3 T.Narayanamma P.W.4 Dudekula Pedda Hussain R.W.4 A.Narayana 9 BSB, J C.M.S.A.No.18 of 2014 P.W.5 Poka Venkaiah R.W.5 K.Joseph P.W.6 C.Veeraiah R.W.6 M.Veeranarayana P.W.7 Vadlamudi Venkateswarlu R.W.7 M.Chenna Reddy (V.R.O) DOCUMENTS MARKED FOR PETITIONERS Ex.A1 Pronote dt.15.2.1988 Ex.A2 Transfer endorsement on pronote, dt.15.2.1988 Ex.A3 Sale deed, dt.23.01.1990 Ex.A4 Sale deed, dt.23.01.1990 Ex.A5 Gift deed, dt.23.01.1990 Ex.A6 Pronote, dt.01.12.1985 Ex.A7 The endorsement on Ex.A6, dt.30.11.1988 Ex.A8 Pronote dated 28.5.1989 Ex.A9 Pronote Dt.05.10.1987 Ex.A10 Pronote, Dt.06.08.1989 Ex.A11 Pronote for Rs.600/- in favour of 5th petitioner on 17.9.1989 Ex.A12 Pronote in favour of 5th petitioner for Rs.500/- on 30.8.1989 Ex.A13 Pronote executed by Tanneru Musalaiah in favour of Venkatadri Dt.02.12.89 for Rs.4600/- Ex.A14 Registered sale deed vide document No.210, dt.15.2.1990 executed by Tanneru Guramma W/o. Musalaiah in favour of T.Galaiah S/o. Pedaramaiah DOCUMENTS MARKED FOR RESPONDENTS Ex.B1 Certificate issued by Sarpanch of Grama Panchayat, Pedayachavaram, dt.05.01.2009 Ex.B2 True copy of Adangal extracts pertaining to respondent No.1 in Sy.No.179 of Peddaraveedu village issued by V.R.O., Naidupalli Ex.B3 True copy of Adangal extracts pertaining to respondent No.1 in S.No.222/01 of Peddaraveedu village issued by V.R.O., Naidupalli 10 BSB, J C.M.S.A.No.18 of 2014 Ex.B4 True copy of Adangal extracts pertaining to respondent No.1 in S.No.222/01 of Peddaraveedu village issued by V.R.O., Naidupalli village, Dt.08.02.2009 Ex.B5 C.C. of registered cancellation deed of mortgage, dt.22.01.1990 executed by P.V.Subbaiah in favour of R1 Ex.B6 Adangal extract for the fasli 1417, dt.12.2.2009 Ex.B7 C.C. of registered mortgage deed document No.1789, dt.16.10.1989 executed by Tanneru Musalaiah in favour of R1 DOCUMENTS MARKED ON COURT SIDE Ex.X1 Attested copy extract of Peda Yachavara D.No.3-31 pertaining to the house of R1 Ex.X2 Attested extract of 10(1) register Ex.X3 Attested extract of 1(b) register in respect of S.No.220 of Yachavaram village Ex.X4 Extract of 10(1) register in respect of S.No.220/1 the corresponding register in respect of 221/1 in the name of Jala Subbaiah Ex.X5 True extract of 1(B) register in respect of S.No.221/1 and 222/2 Ex.X6 True extract of 10(1) register Ex.X7 True extract of relevant entries in 1(b) register Ex.X8 Attested extract of 1(b) register in respect of 221/1 11. Though the scope of remand is to decide the sales under Exs. A3 and A4, the insolvency Court framed the following points for consideration covering the aspect of ‘act of insolvency’ as well. 1. Whether the first respondent committed acts of insolvency? 2. Whether R1 created Ex. A3 and A4 sale deeds in order to evade payment to his creditors? 3. Whether the vendees of Exs.A3 & A4 are bona fide purchasers? 4. To what relief? 11 BSB, J C.M.S.A.No.18 of 2014 After hearing afresh, the insolvency Court allowed the petition as follows: “In the result, this petition is allowed with costs. Respondent No.1 is adjudicated as insolvent. The sale deeds covered under Ex. A3 and Ex. A4 and the gift deed covered under Ex. A5 are hereby set aside and the properties there in are vested with the official receiver Ongole for proper adjudication. Time for discharge one (1) year. The office is directed to inform about set aside of Exs. A3 to A5 documents to the concerned authorities. Charge is created over the property of Respondent No.1 in respect of Rs. 10,000/- (Rupees ten thousand only) deposited by Respondent No.2 and Respondent No.3.” 12. Thus, the insolvency Court not only decided beyond the scope of the remand by adjudicating the insolvency of R1 and setting aside the gift deed, but also set aside the documents simultaneously with adjudication of insolvency in a petition under Section 5 of the P.I. Act without following the procedure under Part-III of the P.I. Act consisting of Sections 45 to 50 and also Sections 53, 54 and 54A of the P.I. Act. 13. The appeal in A.S. No. 174 of 2009 was preferred mainly contending that the evidence was not properly appreciated with regard to the collusion in creating the alleged debts; the properties of R1 available with him; and the bona fide transfer of properties to R2 to R4. After hearing the contesting parties, the appellate Court held that R1 discharged the mortgage debt with the amount given by R2 and R3 in consideration of which the sale deeds under Exs. A3 and A4 were executed in their favour and thus R2 and R3 are bona fide purchasers and therefore the sales cannot be set aside. It was specifically 12 BSB, J C.M.S.A.No.18 of 2014 mentioned that the appeal was disposed of in terms of the directions of the High Court in C.M.S.A. No. 61 of 2006 confining adjudication to the validity of the sale deeds under Exs. A3 and A4. Since the sale deeds were held valid, it was further observed that the appellants have a charge over the other properties of R 24 (C.M.S.A. No. 61 of 2006) who is R25 in the appeal (A.S. No. 174 of 2009). 14. The present second appeal was filed by the aggrieved parties relating to the creditors as noted above. It was contended that the judgment impugned in this appeal is not according to law, facts of the case and the evidence on record; that the appellate Court failed to hold that R1 had developed an evil idea to defeat the debts to the petitioners by showing a false mortgage debt and transferring the high value properties in collusion with his close relatives and his wife, and his other properties are insufficient to discharge the dues to the petitioners and went beyond the directions of the High Court and set aside the well considered order of the insolvency Court. It was further contended that the appellate Court ought to have seen that R1 committed acts of insolvency and that the appellate court decided the validity of the sale deeds and held about the charge without points for consideration regarding them. 15. The learned counsel for the appellants submitted that the first appellate Court had given its own findings without reversing / upsetting the well considered findings of the trial Court and that such failure to exercise its jurisdiction is a substantial question of law in the second appeal. He referred to a decision of the Supreme Court in Santoshi Hazari Vs. Purushottam Tiwari 1 which has been followed by the 1 (2001) 3 SCC 179 13 BSB, J C.M.S.A.No.18 of 2014 Supreme Court in its recent decision in Mahender Pal Chabra and another Vs. Subhash Aggrawal 2 . He further referred to another decision of the Supreme Court in V. Prabhakara Vs. Basavaraj K. (dead) by L.Rs., and another3. The decision of this High Court in Dara Mohan Muralidhar and others Vs. B. Nirmala Devi and others4 was referred by the counsel regarding the procedure to be followed in I.P. and the proposition that there is no need to get a decree against a debtor to maintain a petition seeking declaration of debtor as insolvent. He further submitted arguments as mentioned in the grounds of appeal. 16. The learned counsel for the contesting respondents submitted that there was no act of insolvency committed by R1 / debtor as transfer of property to a third party i.e., a person other than a creditor, is not an act of insolvency as held by this High Court in Gutta Nirmala Vs. Gutta Nageswara Rao and others5 and Boddeti Rameswaram and others Vs. Polamarasetti Trimurthulu and others6 wherein the decision in Gutta Nirmala (supra) was followed and that the appellate Court had rightly appreciated the evidence and came to the conclusion that the sales were bona fide and supported by consideration as the mortgage debt of R1 under a registered deed had been discharged by R1 just a day before the execution of the sale deeds and a registered deed of cancellation of mortgage had also been executed. She further submitted that some of the debts were time barred as on the date of filing of the 2 2024 SCC OnLine SC 331 3 (2022) 1 SCC 115 4 2016 (6) ALT 762 5 2011 (5) ALD 498 6 2011 (6) ALD 736 14 BSB, J C.M.S.A.No.18 of 2014 petition and the properties left in the hands of R1 are sufficient to meet the small amounts of enforceable claims of the creditors, even if they are true. She further argued that any deed of transfer by a debtor cannot be set aside or annulled by the insolvency Court in a petition under Section 9 of the P.I. Act filed to declare a debtor as insolvent for commission of an act of insolvency and that it is only after declaration of a debtor as insolvent, debt is to be proved before an official receiver appointed by the insolvency Court and annul a transaction amounting to act of insolvency by following the procedure under Sections 45 to 50, 53, 54 and 54A of the P.I. Act and only on the application of the official receiver under Section 53 or on his failure to do so, on appropriate petition to get it annulled, the insolvency Court can annul the transaction at that stage. She referred to the decisions of this High Court in Gutta Nirmala (supra), Dara Mohan Muralidhar (supra); and further Gounda Mohammed Yousuf and others Vs. Shaik Saheb and others7 and Tatiparthy Satyanarayana Vs. Palacherla Vijayalakshmi and others8. 17. In reply the learned counsel for the appellants submitted that act of insolvency cannot be decided now as the scope of the remand order is limited to fresh adjudication of the sales under Exs. A3 and A4 only. 18. In Santosh Hazari (supra), the scope of jurisdiction of the appellate Courts to concur with or reverse the findings in the judgment impugned in appeal was held as follows: 7 2015 (6) ALD 166 8 2015 (6) ALD 15 15 BSB, J C.M.S.A.No.18 of 2014 “15. … The first appellate court has, in a very cryptic manner, reversed the finding on question of possession and dispossession as alleged by the plaintiff as also on the question of adverse possession as pleaded by the defendant. The appellate court has jurisdiction to reverse or affirm the findings of the trial court. First appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the appellate court. The task of an appellate court affirming the findings of the trial court is an easier one. The appellate court agreeing with the view of the trial court need not restate the effect of the evidence or reiterate the reasons given by the trial court; expression of general agreement with reasons given by the court, decision of which is under appeal, would ordinarily suffice (See Girijanandini Devi v. Bijendra Narain Choudhary [AIR 1967 SC 1124] ). We would, however, like to sound a note of caution. Expression of general agreement with the findings recorded in the judgment under appeal should not be a device or camouflage adopted by the appellate court for shirking the duty cast on it. While writing a judgment of reversal the appellate court must remain conscious of two principles. Firstly, the findings of fact based on conflicting evidence arrived at by the trial court must weigh with the appellate court, more so when the findings are based on oral evidence recorded by the same Presiding 16 BSB, J C.M.S.A.No.18 of 2014 Judge who authors the judgment. This certainly does not mean that when an appeal lies on facts, the appellate court is not competent to reverse a finding of fact arrived at by the trial Judge. As a matter of law if the appraisal of the evidence by the trial Court suffers from a material irregularity or is based on inadmissible evidence or on conjectures and surmises, the appellate court is entitled to interfere with the finding of fact. (See Madhusudan Das v. Narayanibai [(1983) 1 SCC 35 : AIR 1983 SC 114] ) The rule is — and it is nothing more than a rule of practice — that when there is conflict of oral evidence of the parties on any matter in issue and the decision hinges upon the credibility of witnesses, then unless there is some special feature about the evidence of a particular witness which has escaped the trial Judge's notice or there is a sufficient balance of improbability to displace his opinion as to where the credibility lie, the appellate court should not interfere with the finding of the trial Judge on a question of fact. (See Sarju Pershad Ramdeo Sahu v. Jwaleshwari Pratap Narain Singh [1950 SCC 714 : AIR 1951 SC 120] ) Secondly, while reversing a finding of fact the appellate court must come into close quarters with the reasoning assigned by the trial court and then assign its own reasons for arriving at a different finding. This would satisfy the court hearing a further appeal that the first appellate court had discharged the duty expected of it. We need only remind the first appellate courts of the additional obligation cast on them by the scheme of the present Section 100 substituted in the Code. The first appellate court continues, as before, to be a final court of facts; pure findings 17 BSB, J C.M.S.A.No.18 of 2014 of fact remain immune from challenge before the High Court in second appeal. Now the first appellate court is also a final court of law in the sense that its decision on a question of law even if erroneous may not be vulnerable before the High Court in second appeal because the jurisdiction of the High Court has now ceased to be available to correct the errors of law or the erroneous findings of the first appellate court even on questions of law unless such question of law be a substantial one.” This view has been followed in Mahender Pal Chabra (supra). 19. In V. Prabhakara (supra), it was held, at paragraphs Nos. 22 and 23 as below: “22. The first appellate court while exercising power under Section 96 can re-do the exercise of the trial court. However, such a power is expected to be exercised with caution. The reason being, the trial court alone has the pleasure of seeing the demeanour of the witness. Therefore, it has got its own advantage in assessing the statement of the witnesses which may not be available to the appellate court. In exercising such a power, the appellate court has to keep in mind the views of the trial court. If it finds that the trial court is wrong, its decision should be on the reasoning given. A mere substitution of views, without discussing the findings of the trial court, by the appellate court is not permissible. If two views are possible, it would only be appropriate to go with the view expressed by the trial court. While adopting reasoning in support of its 18 BSB, J C.M.S.A.No.18 of 2014 findings, the appellate court is not expected to go on moral grounds alone. 23. The aforesaid views expressed by us are nothing but a reiteration of the settled principle of law as could be seen through the following paragraphs of the decision rendered by this Court in Jagdish Singh v. Madhuri Devi, (2008) 10 SCC 497 : (SCC pp. 504-08, paras 27-37) “27. It is no doubt true that the High Court was exercising power as the first appellate court and hence it was open to the Court to enter into not only questions of law but questions of fact as well. It is settled law that an appeal is a continuation of suit. An appeal thus is a rehearing of the main matter and the appellate court can reappraise, re-appreciate and review the entire evidence—oral as well as documentary—and can come to its own conclusion. 28. At the same time, however, the appellate court is expected, nay bound, to bear in mind a finding recorded by the trial court on oral evidence. It should not forget that the trial court had an advantage and opportunity of seeing the demeanour of witnesses and, hence, the trial court's conclusions should not normally be disturbed. No doubt, the appellate court possesses the same powers as that of the original court, but they have to be exercised with proper care, caution and circumspection. When a finding of fact has been recorded by the trial court mainly on appreciation of oral evidence, it should not be lightly disturbed unless the approach of the trial court in appraisal of evidence is 19 BSB, J C.M.S.A.No.18 of 2014 erroneous, contrary to well-established principles of law or unreasonable. 29. Before more than a century, in Coghlan v. Cumberland, (1898) 1 Ch 704 (CA)] Lindley, M.R. pronounced the principle thus: … (See also observations of Lord Thankerton in Watt v. Thomas, 1947 AC 484 : (1947) 1 All ER 582 (HL).) 30. In Sara Veeraswami v. Talluri Narayya, AIR 1949 PC 32, the Judicial Committee of the Privy Council, after referring to relevant decisions on the point, stated [ Quoting from Watt (supra)] : … 31. This Court also, before more than half a century in Sarju Pershad v. Jwaleshwari Pratap Narain Singh, 1950 SCC 714 : AIR 1951 SC 120, stated : (SCC p. 717, para 8) … 32. Referring to several cases on the point, the Court concluded : Sarju Pershad v. Jwaleshwari Pratap Narain Singh, 1950 SCC 714 : AIR 1951 SC 120, , SCC p. 720, para 18) … 33. After about a decade, in Radha Prasad Singh v. Gajadhar Singh, AIR 1960 SC 115, this Court reiterated : (para 14) … 34. In T.D. Gopalan v. Commr. of Hindu Religious & Charitable Endowments, (1972) 2 SCC 329 , this Court said : (para 9) … 20 BSB, J C.M.S.A.No.18 of 2014 35. Yet in another decision in Madhusudan Das v. Narayanibai, (1983) 1 SCC 35, this Court said : (para 8) … 36. Three requisites should normally be present before an appellate court reverses a finding of the trial court: (i) it applies its mind to reasons given by the trial court; (ii) it has no advantage of seeing and hearing the witnesses; and (iii) it records cogent and convincing reasons for disagreeing with the trial court. 37. If the above principles are kept in mind, in our judgment, the decision of the High Court falls short of the grounds which would allow the first appellate court to reverse a finding of fact recorded by the trial court. As already adverted earlier, the High Court has “virtually” reached a conclusion without recording reasons in support of such conclusion. When the court of original jurisdiction has considered oral evidence and recorded findings after seeing the demeanour of witnesses and having applied its mind, the appellate court is enjoined to keep that fact in mind. It has to deal with the reasons recorded and conclusions arrived at by the trial court. Thereafter, it is certainly open to the appellate court to come to its own conclusion if it finds that the reasons which weighed with the trial court or conclusions arrived at were not in consonance with law.” 20. Unlike jurisdiction of the first appellate Court under Section 96 of C.P.C., the jurisdiction of the second appellate Court under Section 100 21 BSB, J C.M.S.A.No.18 of 2014 of C.P.C. is limited to substantial questions of law. What is ‘substantial questions of law’ has not been stated in C.P.C. It is by judicial pronouncements, it has been explained. In Santosh Hazari (supra), it was held as below: “12. The phrase “substantial question of law”, as occurring in the amended Section 100 is not defined in the Code. The word substantial, as qualifying “question of law”, means — of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with — technical, of no substance or consequence, or academic merely. However, it is clear that the legislature has chosen not to qualify the scope of “substantial question of law” by suffixing the words “of general importance” as has been done in many other provisions such as Section 109 of the Code or Article 133(1)(a) of the Constitution. The substantial question of law on which a second appeal shall be heard need not necessarily be a substantial question of law of general importance. In Guran Ditta v. T. Ram Ditta [AIR 1928 PC 172 ], the phrase “substantial question of law” as it was employed in the last clause of the then existing Section 110 CPC (since omitted by the Amendment Act, 1973) came up for consideration and their Lordships held that it did not mean a substantial question of general importance but a substantial question of law which was involved in the case as between the parties. In Sir Chunilal V. Mehta & Sons Ltd. v. Century Spg. and Mfg. Co. Ltd. [AIR 1962 SC 1314] the Constitution Bench expressed agreement with the following view taken by a Full 22 BSB, J C.M.S.A.No.18 of 2014 Bench of the Madras High Court in Rimmalapudi Subba Rao v. Noony Veeraju [ILR 1952 Mad 264 : AIR 1951 Mad 969] : “[W]hen a question of law is fairly arguable, where there is room for difference of opinion on it or where the Court thought it necessary to deal with that question at some length and discuss alternative views, then the question would be a substantial question of law. On the other hand if the question was practically covered by the decision of the highest court or if the general principles to be applied in determining the question are well settled and the only question was of applying those principles to the particular facts of the case it would not be a substantial question of law.” and laid down the following test as proper test, for determining whether a question of law raised in the case is substantial: “The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law.” 23 BSB, J C.M.S.A.No.18 of 2014 13. In Dy. Commr., Hardoi v. Rama Krishna Narain [(1953) 2 SCC 319 : AIR 1953 SC 521] also it was held that a question of law of importance to the parties was a substantial question of law entitling the appellant to a certificate under (the then) Section 110 of the Code. 14. A point of law which admits of no two opinions may be a proposition of law but cannot be a substantial question of law. To be “substantial” a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law “involving in the case” there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis.” 24 BSB, J C.M.S.A.No.18 of 2014 21. Keeping all these principles in view and the grounds of appeal raised in this appeal, this Court examines the contentions of both the parties. The following substantial questions of law are framed: 1. Whether the appellate Court has to confine to the directions of the High Court under Order XLVI Rule 25 of C.P.C. ? 2. Whether the appellate Court has traversed beyond the directions of the High Court dated 28.12.2006 in C.M.S.A. No.61 of 2006 with regard to the validity of the sales under Exs. A3 and A4, by setting aside the confirmation made by the High Court ? 3. Whether the appellate Court has not properly exercised its jurisdiction under Section 96 of C.P.C. with regard to reversal of the judgment of the insolvency Court ? 4. Whether the appellate Court has not properly appreciated the evidence on record as per law with regard to the validity of the sale deeds under Exs. A3 and A4 ? 5. Whether the appellate Court is not correct in creating charge over the other properties of Taneeru Musalaiah / R24 (other than the properties under Exs. A3 and A4) in favour of the appellants before it ? 22. Question No.1 - It is not only the appellate Court, but, also the insolvency Court, is bound by the scope of the direction(s) of the High Court in its order remanding the matter for fresh adjudication. The question No.1 raised by the appellants cannot be confined to the appellate Court alone as both the Courts are bound by the directions. 25 BSB, J C.M.S.A.No.18 of 2014 23. Question No. 2 - The High Court allowed the second appeal (C.M.S.A. No.61 of 2006) only insofar as it relates to the sales covered by Exs. A3 and A4 on condition of depositing Rs. 10,000/- by the appellants within the stipulated time and on such deposit, the trial court shall proceed to dispose of the matter, confining its adjudication to the validity of the sales under Exs. A3 and A4. It was further ordered that the amount shall be proportionately distributed among the creditors and that in case the sales under Exs. A3 and A4 are upheld, the appellants shall be entitled to have a charge over the other properties of R24. Though there are specific directions in the order of remand to adjudicate the validity of the sales under Exs. A3 and A4, the insolvency court again went into the question of act of insolvency by framing point No.1. That apart, the insolvency Court dealt with and set aside the gift deed under Ex.A5 which is not the scope of the remand, but, may be to re- emphasise, as the Court consciously recorded that it need not be considered as it was set aside. In C.M.S.A. No.61 of 2006, the findings and order of the insolvency Court and the first appellate Court in A.S.No. 112 of 1995 regarding the act of insolvency or the validity of the gift deed (Ex.A5) and setting aside it have not been disturbed. So, though the finding of the insolvency Court regarding the insolvency, on remand, is beyond the scope of the remand, it is not inconsistent with the undisturbed previous finding. It is pertinent to mention that the previous finding is based on three transactions, whereas, the present finding on act of insolvency shall be limited to transfer by gift under Ex.A5, if the transactions under Exs. A3 and A4 are found to be valid. Therefore, on remand, the order of the insolvency Court dealing with the gift deed / Ex. A5 and setting it aside, being beyond the scope of the remand, is liable to be set aside. Consequently, the judgment of the appellate Court setting aside the order of the insolvency Court to that 26 BSB, J C.M.S.A.No.18 of 2014 extent is legal. No doubt, in Gutta Nirmala (supra), and Boddeti Rameswaram (supra) it was held that the sale of property in favour of a particular person is not an act of insolvency when it is supported by consideration and it was for the discharge of the debt of the debtor and that preference given to a particular debtor cannot be treated as an act of insolvency. But, since the scope of the enquiry is not about the question of act of insolvency, it is not necessary to go into that question. In Gutta Nirmala (supra), Gounda Mohammed Yousuf (supra), Tatiparthy Satyanarayana (supra), and Dara Mohan Muralidhar (supra), it was held that to annul / set aside any transfer of property made by a debtor, the procedure under Sections 53, 54 and 54A of the I.P. Act shall be followed through an Official Liquidator after a debtor is declared as an insolvent and not simultaneously with adjudication of a debtor as insolvent in a petition under Section 9 of the I.P. Act. Therefore, for all the above reasons, the order of the appellate court setting aside the order of the insolvency Court and confining the scope of appeal only to the extent of dealing with the validity of the sales under Exs.A3 and A4 is in conformity with the scope of the remand order of the High Court and the appellate Court has not committed any illegality in this regard. 24. Questions Nos. 3 and 4 – The petitioners contended that the respondent, on 23.01.1990, executed the sale deeds Exs. Nos.3 and 4 in favour of his close relatives and the gift deed Ex. No. 5 in favour of his wife to defeat the claims of his creditors, whereas R1 contended that R5 got the sale deeds executed without paying consideration under the guise of helping him to clear the debts owed under the mortgage and to several other creditors, including the petitioners, and but, the mortgage was redeemed by K. Joseph and Kodanda Ramulu and the cancellation 27 BSB, J C.M.S.A.No.18 of 2014 deed was kept with K. Ramulu. With regard to the gift deed his version is that it was executed as he used his wife’s jewellery and his wife / R4 pleaded that it was sold to Tanneeru Galaiah on 15.02.1990. On the other hand, the contention of R3 and R4 is that the I.P. was got filed by R1 in collusion with the petitioners and that the sales were made for consideration and the mortgage debt was cleared and thus, they claim as bona fide purchasers. The dispute is triangular fight. 25. Both the Courts expressed their opinions after elaborately stating the pleadings and the evidence of all the parties, their witnesses and the documentary evidence. The insolvency Court and the appellate Court gave a concurrent finding that R1 was indebted to several persons. 26. The insolvency Court recorded that P.W.1 to 5 deposed about their respective debts due to them from R1 and further expressed the opinion that when there is no dispute about the execution of Exs. A3 to A5 by R1, he cannot be permitted to take any benefit on the sole ground that the petitioners were not aware of the contents of these documents. The admission of R.W.1 / R1 regarding the debts due to the petitioners was relied, apart from the evidence of the petitioners. The revenue records of 10(i) and 1(b), which now substituted 10(i), were filed in evidence by the petitioners as Exs.X2 to X8 through Tahsildar of Markapur, examined as P.W.6. The insolvency Court opined that his evidence was only to show that R1 had no worth considering properties and furthermore he executed Exs. A3 and A4 only to deprive the petitioners of their rights. As the purchasers contended that R1 had some other properties, they examined R.W.6, Panchayat Secretary of Pedda Yachavaram, and R.W.7, V.R.O. of Naidupalli. R.W.6 deposed about Ex. X1 i.e., extract of General Revision House Tax Register relating to the house of R1. The house tax was Rs.12/- and the house 28 BSB, J C.M.S.A.No.18 of 2014 measures about 15” to 25”. So it was not believed that R1 got worth considering properties. The landed properties were sought to be proved through R.W.7 speaking about Exs.B2 to B4 and B6 which are the revenue records of adangals / pahanies. This evidence was discarded on the ground that only 15, out of 31, columns of the register were shown in them. Regarding the sale deed under (Ex.A14, dt.14.02.1990) executed by R4 in favour of Tanneeru Galaiah, the insolvency court opined that it need not be considered as it is in pursuance of the gift deed (Ex.A5, dt. 23.01.1990) which had been already set aside. Insofar as the sale deeds are concerned, the insolvency Court noted that regarding the purpose of the sales and passing of consideration for the sales, there were inconsistencies in his version and evidence of R.W.1 / R1 and with that of R.Ws.2 and 3, who are R5 and R3 and the evidence of the attestors of the sale deeds (R.Ws.4 and 5) and the attestors were the followers of R5. The Court held that R.W.3 is an innocent lady following the footsteps of her husband / R.W.2 who is a kingpin to the entire litigation and also cited the factors like consideration for Ac.2.15 cents under Ex.A3 being Rs.14,800/-, whereas consideration for Ac.2.25 cents under Ex.A4 being Rs.6,800/-, R.W.3 deposing that her father-in-law (R2) paid the amount to P.V.Subbaiah at her residence which evidence is contrary to the evidence of her husband R.W.2., date of payment, the attestors not giving evidence about passing of consideration and not having knowledge of R1 signing the sale deeds, the purchasers being the close relatives of R1. For all these reasons, the Court suspected the evidence regarding passing of consideration and the bona fides in the sales. It was further observed that when a debtor admits about his inability to pay the debts, and if a debtor conveys his right in a property to another with an intention of defeating the interest of his creditor, it amounts to act of insolvency. All these 29 BSB, J C.M.S.A.No.18 of 2014 circumstances at the backdrop, it was held that R1 had committed acts of insolvency. It held the opinion that a bona fide purchaser is one who purchased an asset for the stated value, innocent of any fact which would cast doubt on the right of the seller to have sold it in good faith. Therefore, it was reiterated that the vendees under Exs.A3 and A4 are not bona fide purchasers stating that R.Ws 2 to 5 were aware of the debts owed by R1 to the petitioners and to the other creditors to a tune of Rs.1,19,675/-, but, the vendees had not taken any steps to care about the debts and hurriedly obtained the sale deeds and only one day prior to them obtained the deed cancelling the mortgage and that they were brought into existence only to defraud the creditors and further that the vendees could not discharge their obligation to claim benefit under Section 54 of the I.P. Act as bona fide purchases. 27. Thus, briefly stating, insofar as the sales under Exs. A3 and A4 are concerned, the insolvency Court disbelieved the evidence of R.W.2 / R5 who is the son of R2 and husband of R3; R.W.3 / R3, and also the attestors to the sale deeds examined as R.Ws.4 and 5, viewing the same in the light of the pleading and the evidence of the petitioners and R1 / R.W.1 and came to the conclusion that there is no evidence that the sales are supported by consideration because of the inconsistencies due to the different stands taken about the manner of payment and disbelieved the documentary evidence of the revenue record under Exs.Nos.B2 to B4 and B6 holding that the evidence of P.W.7 and R.W.7 is not trustworthy. The insolvency Court did not give credit to the evidence of discharge of the mortgage debt under the registered deed marked as Ex.B7 which was cancelled under Ex.B5, the registered cancellation deed. When the evidence was taken after remand of the enquiry, the mortgagee / P.V.Subbaiah died. The insolvency Court 30 BSB, J C.M.S.A.No.18 of 2014 placed burden of proof of passing of the consideration on the respondents. Accordingly, it was held that the transactions under Exs. A3 and A4 were not bona fide. 28. On the other hand, the appellate Court in A.S.No. 174 of 2009 took a contrary view of the sales placing heavy burden on the petitioners, as they admitted execution of the sale deeds, to prove their version that the sale deeds were not supported by consideration and were executed to defeat the claims of the petitioners. It opined that it is R1 who is the best person to place evidence as to how the sale deeds came into existence, but, he had failed to adduce any evidence. It further recorded that P.W.1 / P3 deposed that the sale deeds were collusive, but he further deposed that the contents of the documents (Exs. A3 to A5) were not known to him and so it expressed an important opinion that if really the sale deeds are nominal, the possession of the properties under those documents must be with R1 only and this could have been easily proved, however, there was no iota of evidence that R1 was still in possession of those properties. Regarding P.W.2 / P1, it recorded that he deposed that he had no knowledge of the contents of Exs. A3 to A5 and whether R1 had sold the property for the mortgage to P.V. Subbaiah and so his evidence had not demolished the case of the purchasers. With regard to P.W.3 / P2, it recorded that he deposed that he had heard that R1 had sold the lands but had not enquired about the contents of the documents and had not known the documents filed on his behalf and his evidence, like that of P.W.4, had not established anything about the sale deeds. About P.W.4 / P4, it noted that he deposed that the properties had been settled in favour of R2 to R4 under Exs. A3 to A5 and he had not known whether R1 had disposed his properties to discharge the mortgage debt of P.V.Subbaiah and 31 BSB, J C.M.S.A.No.18 of 2014 further stated that the properties were in possession of R1 and R2 to R4 and as such the Court opined it cannot be true as they must be either with R1 or with the transferees. About P.W.5 / P7, it noted that he deposed that the mortgage deed and Exs. A3 to A5 had been created and R1 had been in possession of the properties, and R2 to R4 had not evinced any interest and that the petitioners claim the properties under Exs. A3 and A4 and therefore, the Court opined that his statements regarding creation of the deeds are bald allegations and he is not even aware of the contents of these documents. The appellate Court, like the insolvency Court, recorded that P.W.1 to 5 deposed about their respective debts due to them from R1. Observing that the overall evidence established that indebtedness of R1 to several persons had lead to filing of I.P., the appellate Court has not accepted the contention of the purchasers that I.P. was filed to defeat the sales. The appellate Court observed that the evidence of R.W.1 had not disclosed that the purchasers had agreed to discharge the debts of the petitioners and there was no evidence that the sale was made only for discharge of the debts and that it was very clear and there is no dispute that the properties covered by the sale deeds were mortgaged to P.V.Subbaiah before the execution of the sale deeds and disbelieved his evidence that the sale deeds had been illegally obtained and also that his mental condition was not good when he had executed them. After discussing his evidence, the appellate Court noted that it was an admitted fact that R1 had disposed of the properties under the sale deeds to discharge the debt due to P.V.Subbaiah and others and that it showed that the purchasers are bona fide purchasers and R1 was fully aware of the execution and contents of the sale deeds. The evidence of R.W.2 and R.W.3 / R5 and R3 to the effect that R1 was indebted to several persons and discharging the mortgage debt of R1 (Ex.B5) as an 32 BSB, J C.M.S.A.No.18 of 2014 admitted fact and there was no rebuttal evidence, and the properties being purchased under the sale deeds, and R1 having the house (Ex.B4) wherein he lives with his family and the landed properties was positively considered by the appellate Court (Exs.B2 to B4) observing that there was no rebuttal evidence to disbelieve them. It found that no evidence was placed to show that there was any collusion between R1 and P.V.Subbaiah (mortgagee) or R3 and R5. Their further evidence regarding payment of the amount by R2, being the head of the family, to discharge the mortgage to purchase properties in favour of R2 and herself was believed as supported by the documents and admission by R1 and no contrary evidence was placed to discard the same. The evidence of R.W.4, the attestor of the sale deeds, about execution of the documents and the discharge of the mortgage debt was held to be strongly corroborating as he is an independent witness and nothing was elicited from this witness in favour of the petitioners. The evidence of R.W.6 regarding the house owned by R1 and R.W.7 regarding the other properties of R1 was positively accepted observing that there was no contrary evidence was placed. Further, it was observed that there was nothing in evidence that the properties were sold for a price lesser than their actual price. Thus, it was concluded that the sales under Exs. A3 and A4 were bona fide. 29. In view of the limited scope of the remand, it is necessary to confine to the scope of that part of the enquiry. In a civil case, while appreciating evidence, the degree of proof required is preponderance of probability and not proof beyond reasonable doubt. The petitioners approached the Court with specific allegations of act of insolvency committed by R1 by executing nominal sale deeds in favour of his close relatives, R2 and R3. Just opposite is the case of the respondent / 33 BSB, J C.M.S.A.No.18 of 2014 purchasers by pleading that they are bona fide purchasers. Merely as they positively pleaded that they are the bona fide purchasers, it is not for them to establish their case. It is the initial burden of the petitioners to discharge their burden of proof of their pleaded case, as they would fail in their case if they don’t prove the allegations, even in the absence of the defence, in view of Section 101 of the Evidence Act which reads as follows: “Section 101: Burden of proof - Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist. When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. Illustration (a) … (b) A desires a Court to give judgment that he is entitled to certain land in the possession of B, by reason of facts which he asserts, and which B denies, to be true. A must prove the existence of those facts.” Therefore, if the petitioners fairly discharge their burden, the onus shifts to the respondents to disprove the same. Without keeping these principles in view, the insolvency Court appreciated the evidence and came to an erroneous conclusion that the respondents could not establish that the sale deeds were supported by consideration. The conclusions drawn by the appellate Court are based on appropriate way of appreciation of evidence. There are no clear observations made by the appellate court as to where the insolvency Court went wrong. The decisions cited above regarding the jurisdiction of an appellate Court in 34 BSB, J C.M.S.A.No.18 of 2014 reversing a judgment of a trial Court spelled out the approach to be adopted by an appellate Court, but, it was not stated that mere absence of the statements of an appellate Court indicating adoption of such approach renders the judgment invalid, even if the decision is otherwise correct for the reasons stated in support of its decision. A judgment of an appellate Court which is devoid of reasons or not in accordance with law needs to be set aside. As such, in the present case, the judgment of the appellate court which is otherwise sustainable need not be set aside. 30. Question No. 5 – Consequent to holding that the sales are valid, only in pursuance of the direction of the High Court in the order of remand, charge over the other properties of Tanneeru Musalaiah / R24 (other than the properties under Exs. A3 and A4) in favour of the appellants was created. So, the judgment of the appellate Court is in no way illegal. 31. In view of the foregoing discussion, there is no merit in the appeal. 32. In the result, the appeal is dismissed. No costs. Pending miscellaneous applications, if any, shall stand closed. ___________________ B. S. BHANUMATHI, J Dt.09.05.2025 RAR