SRIKANTIAH SETTY Vs. ABDULLA BASHA SAHEB AND COAND

JUDGEMENT

(1.) On 18-3-1942, four creditors of one S. M. Zackria whom I shall hereafter refer to as the insolvent, made an application to the District Judge, Bangalore, under Section 9 of the Mysore Insolvency Act for getting him adjudged insolvent. On that application he was so adjudged insolvent on May 29, 1942. On July 7, 1942, the Official Receiver made an application (I. A. 2) under the provisions of Sections 5, 53 and 54 of the Act for a declaration that transfer made by the insolvent of his properties in favour of respondents 1 to 4 on January 5, 1942, and a subsequent transfer of those properties by respondents 1 to 4 in favour of the fifth respondent was voidable and should be annulled. He also added a further prayer to his application that the Court should direct the said properties or their value to be handed over to him by the respondents.

(2.) Respondents 1 to 5 opposed that application and the learned District Judge allowed it. Respondents 1 to 4 have appealed and respondent 5 has not.

(3.) It is admitted that on January 5, 1942, by a document of sale which is not exhibited in this case the insolvent transferred to respondents 1 to 4 who were some of his creditors, all his assets belonging to a business which he was conducting. It is stated, although it is not admitted by the Official Receiver, that the consideration for the transfer was a sum of Rs. 3,300. On the next day, i.e., on January 6, 1942, respondents 1 to 4 in their turn transferred all those assets which they had purchased from the insolvent to respondent 5 and it is stated that the consideration for that transfer was a sum of Rs. 5,500. The case for the Official Receiver is that both these transfers were neither made in good faith nor for valuable consideration but were made for the purpose of defrauding the other creditors of the insolvent. As I have mentioned above, a little more than two months after the dates of these transfers some other creditors of the insolvent presented the application for getting Zackria adjudged insolvent. In the meanwhile, the insolvent himself had issued a notice (Ex. III) on January 29, 1942, twenty-five days after he had transferred his assets to respondents 1 to 4, repudiating the transaction of transfer and also alleging that a document in that regard had been fabricated by respondents 1 to 4. I. A. 2 filed by the Official Receiver for getting these transfers annulled, was made as I have mentioned above, on July 7, 1942.