MARY NINAN Vs. OFFICIAL RECEIVER KOTTAYAM DISTRICT COURT

JUDGEMENT

(1.) This appeal arises out of an order passed by the court below in its insolvency jurisdiction avoiding at the instance of the Respondent-Official Receiver, a sale deed executed by the insolvent to the appellant's mother as amounting to a voluntary transfer.

(2.) The Insolvent T.P. Cherian was a retired Inspector of Schools and was adjudged as such on his own petition dated 30-12-1117. He was then indebted to the extent o about Rs. 2000/- the principal debt being a co-operative award for about Rs. 1450. It was after this award had been passed that he executed Ext. A sale herein, in favour of Annamma, the wife of his younger brother Tharian on 5-5-1116. The sale was again of the only property of the insolvent left with him at the time, viz., a 40 cent vacant plot lying along with a 52 cents plot and building belonging to Phillippos-another brother of the insolvent; on the side of the K. K. Road within one mile of the Municipal limits of Kottayam town. These two plots, totaling 92 cents had been jointly mortgaged with possession by the insolvent and Phillippose in 1114 and the mortgage was still outstanding. Ext. A therefore was jointly executed by the insolvent and Phillippose and comprised all their 92 cents as above. The total consideration of Rs. 1380/- under it was made up of 4 items which were all reserved with the vendee, viz., (i) Rs. 500 for payment to the prior usufructuary mortgagee of the property, (ii) Rs. 210 for payment to brother Tharian as balance under Ext. II pro-note dated 16-12-110 executed by him by the insolvent, (iii) Rs. 390 for payment to 'the insolvent himself on demand at any future date, and (iv) Rs. 280 for payment to Phillippose joint vendor.

(3.) The vendee's husband Thariaii examining himself as P. W. 1 claimed that Ext. A was taken benami for himself in the name of his wife, and that he had adjusted the 2nd item of consideration and further paid off the 3rd item under a reccipt. Ext. V dated 7-5-1116, viz., within two days of Ext. A. He also spoke to having redeemed the prior mortgage and obtained possession of the property. The insolvent examined as P. W. 3 admitted that there was no pressure either from the mortgagee or his brother Tharian about the clearing off, of their debts at the lime of Ext. A. Hut he said his son's illness required ready cash money and so he was compelled to sell. He did not make any provision for any other creditors because no money was left and they were not also insistent. On the valuation of the property P. W. 1 and P. W. 3 spoke to Rs. 15 or 20 per cent as a reasonable price at the time and P. W. 3 went so far as to say that he got credit for only Rs. 600' at Rs. 15 per cent but this was obviously wrong since his proportionate mortgage debt and the items 2 and 3 under Ext. A came in all to Rs. 818. There was the evidence before the lower court of the Secretary of the creditor Society as P. W. 2 that the value per cent of the property in 1118 was Rs. 50 though at the date of the annulment petition it had soared up to Rs. 250. On this evidence the court below-was easily able to come to the conclusion that the sale deed was for gross undervalue and executed in fraud and collusion with a view only to the selfish advantage of the insolvent. It found in favour of the vendee in respect of the promissory note forming the 2nd item of consideration under Ext. A but it was definite that 3rd item of ready cash consideration did not pass, particularly in view of the artificial interval of two days between Ext. A and the alleged payment under Ext. V. As to the bona fides of the transaction, P. W. 1 no doubt, protested his innocence and even swore to ignorance of the insolvent's financial embarrassment at the time but the court below refused to believe him and so set aside Ext. A so far as the insolvent was concerned. Hence this appeal by the 2nd respondent in the count below, who had been impleaded as legal representative of her mother the 1st respondent there.