Deoki Nandan Singh v. Saiyed Jawad Hussain And Another

Deoki Nandan Singh v. Saiyed Jawad Hussain And Another

(High Court Of Judicature At Patna)

| 02-11-1927

Ross, J.This is an appeal by the plaintiff in a suit for a declaration that be was the purchaser in good faith and for consideration of two dams share in mauza Chobra Bargoan by a conveyance dated 17th March 1921, and for an injunction restraining defendant 1 from executing a decree, which he had obtained against defendant 2, by sale of that property.

2. The plaint alleges that, on 10th February 1921, defendant 2 entered into an agreement for sale of this property to the plaintiff and that the conveyance was executed on 17th March. The property had been attached before judgment in a suit for money brought by defendant 1 against defendant 2. The claim by the plaintiff had been decided against him in the Court executing that decree; and, therefore, this suit was brought. Defendant 2 in her written statement, supported the plaint admitting receipt of Rs. 200 at the time of the agreement for sale and of the balance at the execution of the deed. The defence of defendant 1 was that the conveyance was fraudulent and collusive; that the plaintiff was the benamidar of defendant 2; and that no consideration passed.

3. Both the Courts below have dismissed the suit. The learned District Judge deals first with the passing of consideration and while he holds that out of the total sum of Rs. 1,200, Rs. 552 had been paid to one of the creditors of defendant 2, the evidence of the payment of the balance was only that of the patwari of defendant 2 and, in his opinion, there was no proof of the passing of full consideration. The learned Judge then went on to deal with the question of fraud and collusion and, with reference to the relevant dates in the suit, namely, the dates of summons on defendant 2, of the order of attachment, of the appearance of defendant 2, and of the agreement for sale, and of the attachment, and of the conveyance, he concluded that defendant 2 knew of the suit when she entered into the agreement for sale; that the plaintiff was also aware of the suit and of the attachment; and that the transaction itself was fraudulent and collusive within the meaning of Section 53, T.P. Act, apparently on the ground that only a portion of the consideration was used for the payment of debts and the debtor received a substantial sum in cash. With regard to possession, the learned District Judge agreed on the evidence with the finding of the Subordinate Judge that the plaintiff had not proved his actual possession over the property. But there seems to be no definite finding on this point by the Subordinate Judge though he apparently did not consider the evidence of possession satisfactory

4. There are two separate matters: the first is the effect of the attachment before judgment; and the second is the question of fraudulent transfer. Order 38, Rule 10 provides that attachment before judgment shall not affect the rights existing prior to the attachment of persons not parties to the suit. Now the agreement for sale was entered into before the attachment took place; and consequently the attachment could not affect the plaintiffs right to a conveyance under that agreement. The attachment before judgment was, therefore, immaterial in this case.

5. Nor does it seem to me that the defence of fraudulent transfer has been made out. This is not a pure question of fact. Nothing in Section 53 bars the right of any transferee in good faith and for consideration. There can be no doubt that in this case the transfer was for consideration and it was made at a time when a transfer could be made. Now its effect no doubt has been to delay or to defeat a creditor and, in such circumstances, the transfer may be presumed to have been made with that intent and, therefore, to be voidable at the option of the creditor, if it was made gratuitously or for a grossly inadequate consideration. This was not a voluntary transfer and it was not suggested that a consideration of Rs. 1,200 was insufficient.

6. It was found that almost half of the sum was actually paid to one of the creditors and the vendor in her written statement admits receipt of the balance. While the learned District Judge holds that the plaintiff had failed to prove passing of full consideration, he also finds that only a portion of the consideration was used for payment of debts and the debtor received a substantial sum in cash.

7. It does not seem that these two findings are strictly consistent with each other. It is no part of the duty of the purchaser to see what is done with the purchase money; and, even if the full consideration was not paid, this would not, in my opinion, be a ground for holding that the transaction was fraudulent. The applicability of Section 53 has not, in my opinion, been shown; and, as neither that section nor attachment before judgment was available as a defence to this suit, it seems to me that there ought to have been a decree.

8. I would, therefore, allow this appeal and decree the plaintiffs suit with costs throughout.

Wort, J.

9. I agree.

Advocate List
Bench
  • HON'BLE JUSTICE Wort, J
  • HON'BLE JUSTICE Ross, J
Eq Citations
  • AIR 1928 PAT 199
  • LQ/PatHC/1927/179
Head Note

A. Transfer of Property Act, 1882 — S. 53 — Fraudulent transfer — Transfer of two dams share in mauza Chobra Bargoan by a conveyance dt. 17-3-1921, in good faith and for consideration of Rs. 1200 — Held, S. 53 does not bar the right of any transferee in good faith and for consideration — Transfer was for consideration and it was made at a time when a transfer could be made — Its effect no doubt has been to delay or to defeat a creditor and, in such circumstances, the transfer may be presumed to have been made with that intent and, therefore, to be voidable at the option of the creditor, if it was made gratuitously or for a grossly inadequate consideration — This was not a voluntary transfer and it was not suggested that a consideration of Rs. 1200 was insufficient — Almost half of the sum was actually paid to one of the creditors and the vendor in her written statement admits receipt of the balance — While the District Judge holds that the plaintiff had failed to prove passing of full consideration, he also finds that only a portion of the consideration was used for payment of debts and the debtor received a substantial sum in cash — It is no part of the duty of the purchaser to see what is done with the purchase money — Even if the full consideration was not paid, this would not, in the opinion of the Court, be a ground for holding that the transaction was fraudulent — The applicability of S. 53 has not, in the opinion of the Court, been shown — As neither S. 53 nor attachment before judgment was available as a defence to this suit, it seems to the Court that there ought to have been a decree — Civil Procedure Code, 1908 — Or. 38 R. 10