Patna High Court
Babu Deokinandan Singh vs Saiyed Jawad Hussain And Anr. on 2 November, 1927
Equivalent citations: 106IND. CAS.356
JUDGMENT Ross, J.
1. This is an appeal by the plaintiff in a suit for a declaration that he was the purchaser in good faith and for consideration of 2 dams share in Mauza Chobra Bargaon by a conveyance dated the 17th of March, 1921, aod for an injunction restraining the 1st defendant from executing a decree, which he had obtained against the second defendant, by sale of that property.
2. The plaint alleges that on the 10th of February, 1921, the defendant No. 2 entered into an agreement for sale of this property to the plaintiff and that the conveyance was executed on the 17th of March. The property had been attached before judgment in a suit for money brought by the first defendant against the second defendant. The claim by the plaintiff had been decided against him in the Court executing that decree; and, therefore, this suit was brought. The second defendant 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 the first defendant was that the conveyance was fraudulent and collusive; that the plaintiff was the benamidar of defendant No. 2; and that no consideration passed.
3. Both the Court 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 No. 2, the evidence of the payment of the balance was only that of the Patwari of the defendant No. 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 No. 2, of the order of attachment, of the appearance of defendant No. 2 and of the agreement for sale and of the attachment and of the conveyance, he concluded that the defendant No. 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 s 53 of the Transfer of Property 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 Sub-ordinate 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 XXXVIII, 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, that attachment could not affect the plaintiff's 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. It is found that almost half of the sum was actually paid to one cf 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. 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 ma that there ought to have been a decree.
6. I would, therefore, allow this appeal and decree the plaintiff's suit with costs throughout.
Wort, J.
7. I agree,