R. JAYACHANDRAN AND OTHERS Vs. T.A. KALIFULIAH

JUDGEMENT

(1.) Insolvency Petition No. 42 of 2007 is a Debtor's petition filed by the 1st respondent herein seeking to adjudicate himself as an insolvent. The said petition was filed on 11.04.2007 and an order of adjudication came to be passed on 26.04.2007. The assets of the insolvent were directed to vest in the Official Assignee, who is administering the estate. During the course of the administration of the estate of the insolvent, it was discovered that the insolvent had sold two items of properties under two sale deeds in favour of the 3rd respondent. The said sale deeds have been executed on 05.03.2007, i.e. within a period of two years prior to the insolvency proceeding, the said sale deeds are sought to be set aside by the Official Assignee. Some of the unsecured creditors of the insolvent have also filed an application in Application No. 282 of 2007 seeking a direction to the Official Assignee to set aside the sale.

(2.) The Official Assignee has also filed a report to which the 3rd respondent who is a purchaser has filed a counter affidavit. In the report of the Official Assignee dated 28.04.2008 seeking to set aside the sales in favour of the 3rd respondent invoking the powers of the Insolvency Court under Section 55 of the Presidency Towns Insolvency Act, it is stated as follows. The 1st defendant T.A.Kalifuliah has been adjudicated as an insolvent on his own petition by an order dated 26.04.2007 in IP No. 42 of 2007. He has disclosed House Hold Articles worth about Rs. 10,000/- as assets. He has disclosed 123 creditors and the total debt outstanding was shown as Rs. 1,12,26,286.35. It is stated that on 05.03.2007, the said debtor has sold his properties in favour of the 3rd respondent, the transfers are made within 36 days prior to the date of the filing of Insolvency Petition, viz. 11.04.2007. It is also claimed that the 3rd respondent is the brother of insolvent.

(3.) According to the Official Assignee, the properties sold under the two sale deeds dated 05.03.2007, on worth more than the value reflected in the sale deeds and sale deeds have been executed with a view to screen away the properties from the creditors of the insolvent. It is further stated that the value of the property according to the valuer appointed by the Official Assignee are about Rs. 90,20,000/- and Rs,5,09,000/- respectively. But the said properties have been sold for a consideration of Rs. 45,00,000/- and Rs. 1,00,000/- under the sale deeds dated 05.03.2007, registered as document Nos.626 and 627 of 2007. The Official Assignee would further point out that the properties were situate in prime location in Poonamallee Town. It is also submitted that the 3rd respondent has been carrying on business in the adjacent premises and that he was aware of the indigent circumstances of the 1st respondent the debtor.