Kanchanbai vs Motichand

P.K. Tare, J.—This appeal is by the Defendants against the decree, dated, 1 9-1961, passed by Shri S. J. Surana, District Judge, Dhar. in Civil Regular Appeal No. 97 of 1960, reversing the decree, dated 30-6 1961, passed by Shri R. L. Chandnani, Civil Judge, Class II, Badnawar, in Civil Suit No. 17 of 1959.

The Respondents filed a suit for setting aside a gift, dated, 3-10-1956 executed by the first Appellant in favour of her daughter-in-law, the second Appellant on the ground that it was with intent to defeat the Plaintiffs'' claim. The Plaintiffs had to recover Rs. 2600/- from the first Appellant. On 17-9-1956, the Plaintiffs served a notice making demand for repayment and in default a suit would be filed. After the receipt of the notice Mst. Kanchanbai executed the said gift in favour of her daughter-in-law in order to defeat and delay the debt of the Plaintiffs.

The Appellants in their defence denied that the gift was made with intent to delay or defeat the debt of the Plaintiffs. It was further contended that Section 53 of the Transfer of Property Act was not attracted, as there was a single creditor.

The learned Judge of the trial Court dismissed the suit holding that the transfer was not with intent to defeat or delay the creditor. However, the learned appellate Judge reversed that finding and held that the transfer was with intent to delay and defeat the Plaintiffs'' claim. The learned appellate Judge also held that it was sufficient for Section 53 to be attracted even if there be a single creditor whose claim is likely to be defeated.

The only point urged by the learned Counsel for the Appellants is that Section 53 of the Transfer of Property Act cannot be availed of where there is a single creditor whose claim might be delayed or defeated. It is true that there is some conflict of views on this question. The learned appellate Judge preferred the view as expressed in Naraindas Pirumal v. Bhojraj Premchand and Anr. AIR 1939 Sind 97, Mohammad Ishaq and Ors. v. Mohammad Yusuf and others AIR 1927 Lah 420, and Mst. Bibo v. Sampuran Singh AIR 1936 SC 222, as against the contrary view expressed in some other cases. It is, therefore, necessary to examine the two views.

The question came up for consideration before a Division Bench of the Sind Judicial Commissioner''s Court in Naraindas Pirumal v. Bhojraj Premchand and another ILR 1939 Karachi 269, wherein Davis, J. C. and Dadiba C. Mehta J. held that in order to attract Section 53 of the Transfer of Property Act, it would be sufficient if the intent of the debtor would be to defraud a single creditor. Therefore; the learned Judges; relying on the earlier cases of Lahore High Court in Mohammad Ishaq and Ors. v. Mohammad Yusuf and Ors. (supra) AIR 1927 Lah 420; and AIR 1936 222 (Lahore) ; held that the section would be attracted even where a single creditor is defrauded.

To the same effect was the view expressed by a Division Bench of the Travancore Cochin High Court in Pothen Ouseph v. Eipe Annamma AIR 1951 TC 237, wherein Kunhi Raman, C. J. and Subramania Iyer, J, held that it is not necessary that in order that a transfer may be in fraud of creditors; there should be more than one creditor. In the opinion of the learned Judges; even if a transaction be directed to defrauding one creditor alone it would still be one in fraud of creditors voidable by the creditor sought to be defrauded or delayed.

I may further refer to the view as expressed by a Division Bench of the Madhya Bharat High Court presided over by Dixit, J. (as he then was) and Newaskar, J. in Magnibai Kishories v. Kesrimal Sawairam and Anr. 1955 MBLJ 2199: AIR 1955 MB 159, wherein the learned Judges expressed that the word ''creditor'' in Section 53 would include even the future or subsequent creditors. Therefore, in the opinion of the learned Judges; the essence of the matter would not, be whether it is made to defeat numerous or general body of creditors; but it would be whether it is made to defeat or delay creditor or creditors. Therefore; in the opinion of the learned Judges the section might be attracted even where there is a single creditor likely to be delayed or defacted.

However, a contrary view was expressed by Panchakesa Ayyar, J. in Thaher Unnissa Begum Vs. Sherfunnissa Begum, , wherein the learned fudge expressed the opinion that Section 53 will apply only when the transfer is made with intent to defeat or delay the creditors of the transferor, and not one single creditor who may be a decree-holder executing his decree.

At this stage, it is not necessary to refer to other cases deciding whether the section would be attracted where future creditors may be defeated. Suffice it to say that in this appeal we may take it for granted that the existence of present creditor or creditors whose debts are imminent might be sufficient to attract this section. We are not concerned with the case of a prospective creditor. The impugned transfer was made by the first Appellant after the receipt of notice issued by the Respondents claiming repayment. Therefore, there can be no doubt that the Respondents claim for recovery of the debt was imminent, and in the event of non-compliance with their demand about repayment, they threatened to file a suit for recovery of the debt. It was after the receipt of such a notice that the first Appellant executed a gift in favour of her daughter-in law.

Out of the two views expressed, that of the Division Benches of the Sind Judicial Commissioner''s Court, the Travancore-Cochin High Court and the Madhya Bharat High Court would be preferable to the contrary view expressed by a Single Bench of the Madras High Court for the simple reason that the phrase'' creditors'' would also include a single creditor. It is true that a suit has to be filed by a creditor in a representative capacity on behalf of the creditors generally. A suit by a single creditor would always be tenable, if it be in a representative capacity; but there appears to be no warrant for the proposition that even though a single creditor might be defeated by such a transfer, there would be no remedy for filing a suit for avoiding the transfer u/s 53 of the Transfer of Property Act. In my opinion, it would be an unwarranted interpretation not supportable by the very wording of the said section. From this point of view, the view of the Division Benches of the Sind Judicial Commissioner''s Court, the Travancore-Cochin High Court, and the Madhya Bharat High Court would be a more reasonable and correct view.

There is another reason why I would like to prefer the view of of the Sind Judicial Commissioner''s Court, the Travancore-Cochin High Court and the Madhya Bharat High Court. In Dhansukhdas v. Jhango 16 NLR 3. Henry Drake Brochman, J. C. held that where the claim of a transferee of attached property, preferred under Rule 58 of order 21 of the Civil-Procedure Code, is dismissed and the transferee brings a suit under order 21 Rule 63, CPC for a declaration of his right to the property, it is open to the attaching creditor to plead as a defence to the suit that the alienation is void u/s 53 of the Transfer of property Act. The learned Judge dissented from the earlier view of the Madras High Court expressed in Subramania v. Muthia ILR 41 Mad 612, and followed the subsequent view of the same High Court expressed in Pokker v. Kunhamad ILR 42 Madras 143 this view of Henry Drake Brockman, J. C. found favour with Kinkhede A. J. C in AIR 1927 57 (Nagpur) , where in the learned Judge, relying on the observations of Henry-Dark-Brookman, J. C., as also the Full Bench case of Ramaswami Chattiar v. Mallappa Reddiar AIR 43 Madras 760, expressed the opinion that an alienation although with permission of the Court but obtained by fraud or misrepresentation being voidable only, its avoidance could be event by setting up a defence to a suit to enforce it, and not necessarily by bringing a suit to have it set aside. Therefore, if such a voidable transfer can be avoided while setting up a defence without filing a suit by challenging the same u/s 53 of the Transfer of Property Act, I fail to see why a single-creditor may not be able to challenge such a transfer where he may be the only creditor likely to be delayed or defeated. For this reason also, I would prefer the view expressed by the Division Benches of the Sind Judicial Commissioner''s Court, the Travancore-Cochin High Court and the Madhya Bharat High Court as against the view expressed by a Single Bench of the Madras High Court.

As a result of the discussion aforesaid, it is a clear that the view taken by the learned District Judge calls for no reversal. In my opinion, the learned Judge was right in reversing the decree of the trial Court by rejecting the contrary view. Consequently, this appeal fails is accordingly dismissed with costs. Counsel''s fee according to schedule or certificate, whichever be less. The costs of the Courts below shall be borne as directed by the first appellate Court.