KISHAN DASS TALWAR Vs. ADESHWAR LAL

JUDGEMENT

(1.) This suit for declaration has been filed by the creditors of the insolvent, defendant No. 1. purporting to be for and on behalf of all the creditors (presumably under Section 53 of the Transfer of Property Act) for a declaration that the partition decree in Suit No. 680 of 1967 is a nullity and does not bind the plaintiffs as it had been obtained fraudulently and collusively with intent to defraud the creditors and defeat their claims.

(2.) The brief facts of the case, as disclosed on the record, are that defendant No. 1, who is father of defendants 2, 3 and 4 and a son of defendant No. 5, who is his mother, was carrying on business under the name and style of M/s. Dhoomimal Dharamdas. On 14th April, 1967, a petition for adjudging the present defendant as insolvent was filed in the Insolvency Court by another creditor named Chander Bal Kakkar under Section 9 of the Insolvency Act which was followed by a petition of the plaintiffs before me filed on 6th June, 1967. An interim Receiver was appointed by the Insolvency Court on 7th June, 1967 and finally by order dated 16th January, 1969 (Exhibit P. 16) defendant No. 1 as well as his firm have been adjudged insolvents and the Official Receiver had been appointed to take charge of the estate of the insolvent. I am informed that the appeal against the said order failed before the District Judge on 2nd June, 1969. It has been alleged by the plaintiffs that on 14th August, 1967. while the insolvency petition was pending the present defendants 2, 3 and 4, who are minors as well as defendant No. 5. instituted a suit (copy of the plaint Exhibit P. 10) against defendant No. 1 for partition of the property situated in Dhoomimal Street, Churiwalan, Delhi. The suit was filed in the Court of the Subordinate Judge and was transferred to the High Court and the claim in the suit was admitted by the present defendant No. 1 in his written statement (copy Exhibit P. 11) and the statement on oath (Exhibit P. 12) on 6th December, 1967 and on the same day a preliminary partition decree was passed by this Court (Om Prakash, J.) which was followed by a final decree dated 3rd April 1968 (Exhibit P. 14) by which decree the parties to the suit had been allotted one fifth share each in the said property. The plaintiffs have brought the suit on the allegations that the said partition decree is fraudulent and collusive and has been suffered by the insolvent during the insolvency proceedings in order to defraud the creditors and since the insolvency proceedings are pending the decree does not bind the creditors and is a nullity.

(3.) The suit had been contested on behalf of defendant No. 1 who filed a written statement as well as by defendants Nos. 2 to 5 who have filed a joint written statement. Defendant No. 6 is the Official Receiver of the insolvent's estate who has not filed any written statement and the proceedings against him have been ex parte under orders of this Court dated 20th May, 1969. A replication to the written statement had also been filed on behalf of the plaintiffs. During the pendency of the proceedings, the plaintiffs also obtained leave of this Court under Order 1, Rule 8 of the Code of Civil Procedure by order of Parkash Narain, J. dated 20th May. 1969 passed in I. A. 281 of 1969.