OFFICIAL ASSIGNEE MADRAS Vs. TEHMINA DINSHAW TEHRANI

JUDGEMENT

(1.) THE Official Assignee, Madras, has taken out this application by Judge's summons under S. 7 of the Presidency Towns Insolvency Act (hereinafter referred to as the Act), to declare that the site at No. 3/2-A College Road, Nungambakkam, madras and the building put up thereon are the sole and exclusive property of dinshaw K. Tehrani, the second respondent insolvent, that the deed of release dated 27-8-1955 executed by the insolvent in favour of his wife, the first respondent, is sham and nominal and was not intended to confer any title upon the first respondent and that the entire property vests in the Official Assignee and is available for the benefit of the creditors. In the alternative, the Official Assignee has prayed that if it is considered necessary the deed of release may be set aside as fraudulent as against the creditors made with the intention of defeating and delaying the creditors. The Official Assignee has also prayed for delivery of possession of the property. The second respondent, who was engaged in the business of producing cinema films, was adjudged insolvent on his own application on 2-12-1964. He admitted debts to the tune of Rs. 3,20,343-58. In the petition to adjudge him insolvent he stated that the property in question was purchased in the joint names of himself and his wife, that he had no beneficial interest therein, the same having been exclusively acquired out of his wife's own funds and that his name was included only nominally. The site originally belonged to one Md. Shansuddin Sahib. He conveyed it under the sale deed Ex. P-1 dated 5-7-1948 for rs. 21955-11-8 in favour of both the respondents. The endorsement made by the sub-Registrar upon that registered sale deed says that on behalf of the two respondents one Purushotham handed over a crossed cheque drawn on the chartered Bank of India in favour of the vendor for Rs. 21,595-11-8. That cheque had been issued by late Advocate Ranghachari. After purchasing the site, a superstructure was put upon it. The two respondents jointly executed a simple mortgage deed on 12-7-1952 in favour of the Midland Insurance Co. , for a sum of rupees 25,000, for the purpose of the construction. On 27-8-1955, the second respondent insolvent executed the release deed Ex. P-3 in favour of his wife, the first respondent, reciting inter alia that the beneficial interest in the property exclusively belonged to the first respondent, that it was her money that was used for the purchase of the land, that the name of the husband insolvent was included in the sale deed for the purpose of convenience merely with a view to obviate the necessity of the personal attendance of the wife in interviewing the public authorities for mutation of names in the revenue registers, securing actual possession of the plot, effectuating sub-division etc. , that it was not intended that the insolvent should have any manner of right, title or interest in the site, that the first respondent who had applied and received the necessary quota for purchase of steel requirements for the construction, that the first respondent was dealing with the property as her own that in view of the inconvenience which the wife was experiencing she pressed her husband to execute a proper deed of release and relinquishment and that in order to dispel the cloud of doubt upon the exclusive title of the wife, the husband executed the deed of release. After this release, the property came to stand solely in the name of the wife, the first respondent.

(2.) THE case of the Official Assignee is that the insolvent had trouble with the income-tax authorities for his unaccounted wealth, that the entire consideration for the purchase of the plot was found only by the insolvent, that the insolvent's wife had no wherewithal to purchase the property, that with a view to put off the scrutiny by the income-tax authorities, the insolvent included his wife's name in the purchase of the property, that the insolvent himself put up the construction out of his funds and out of the fund borrowed from Midland Insurance Co. , that the property belonged exclusively to the insolvent, that in about 1955 the insolvent became, heavily involved when he had to meet the claims of several artists engaged in the films, that with a view to screen the property, he executed the release deed containing false recitals and that the first respondent wife has no manner of title to the property.

(3.) THE respondents have filed separate counter-statements but putting forward the same contentions. The defence is that the plot was purchased exclusively with the funds of the first respondent, that the first respondent put up the superstructure with her own funds and dealt with the property as her own, that the first respondent discharged the debt borrowed from Midland Insurance Co. , that the first respondent had moneys belonging to her having been given to her by her father, and had moneys borrowed from relations, that with those moneys the construction was put up and that the insolvent had no title to the property. The case of the Official Assignee with regard to the release deed is controverted and it is alleged that the release deed was executed only in recognition of antecedent title of the first respondent and that the insolvent never had any manner of title. It is also contended that the Official Assignee is not entitled to the reliefs asked for in this proceeding under Section 7 of the Act. . . . . . . . (Discussion of facts omitted)