BABUBHAI Vs. GANGJI JESANG CHEDA

JUDGEMENT

(1.) This is an application by the Official Assignee for a declaration that the family arrangement dated 30th October 1967 under which the tenancy rights of two shops bearing Nos. 4 and 5 situate at 177, Dogri Street, Bombay belonging to the insolvents were allotted to Bai Ratanbai Morarji Kanji, and which arrangement has been declared as a fraudulent transfer by a judgment of this Court dated 8-10-1971 confirmed in appeal by this Court on 13-1-1981, be set aside, and the Official Assignee may be ordered to taken possession of these shops and to proceed thereafter with the sale thereof either by public auction or by private treaty as the Official Assignee may deem fit and proper. The Official Assignee has also prayed that the "transfers" and made by Bai Ratanbai in respect of the said shops under an agreement dated 11-4-1974 to Atul Dongarsi & Co., and under an agreement dated 13-10-1078 to Varsha Traders as well as a partnership deed dated 23-12-1968 between Bai Ratanbai Morarji and Babubhai Govindji Thakkar be declared as null and void and not binding on the Official Assignee.

(2.) In the present case the relevant facts are as follows: The debtors, namely, Babubhai Jadavji Thakkar. Mithabai Jadavji Thakkar and Jayantilal Dwarkadas Thakkar, all carrying on business in the firm name and style of Messrs Morarji Kanji & Co., and Messrs. Jayantilal Jadavji & Co., were adjudicated Insolvents on 8-10-1971 on a petitioner dated 31-1-1969 filed by the petitioner creditor. One of the acts of insolvency which was alleged was family arrangement of 30th October 1967 under which the insolvents purported to transfer their tenancy rights in Shops Nos. 4 and 5 situate on the ground floor of Ismail Dossa Building, 177/79, Dongri Street, Bombay-9 in favour of Bai Ratanbai Morarji Kanji, who is a grant-mother of two of the debtors. By its judgment and order dated 2-10-1971 this court held that the so-called family arrangement under which the tenancy rights in respect of the said shop were transferred to Bai Ratanbai were fraudulent transfers and that there transfers themselves constituted an act of insolvency. The Court passed an order of adjudication upon the debtors. From this order the transferee Bai Ratanbai preferred an appeal to a division bench of this judgment and order dated 13-1-1981.

(3.) After the order of adjudication, the transferee Bai Ratanbai entered into an agreement dated 11-4-1973, with M/s. Atul Doongarsi & Co. The agreement is an agreement to leave and licence between the transferee Bai Ratanbai and M/s. Atul Doongarsi & Co. under which M/s. Atul Dongarsi & Co. have been permitted to use a portion of shops Nos. 4 and 5 of the purpose of storing their goods on the terms and conditions mentioned in that agreement. Prior to the execution of this agreement, there is a recording letter from M/s. Atul Doongarsi & Co. addressed to Bai Ratanbai and dated 31-3-1973, under which they have declared that they have on 31st March, 1973 surrendered vacant possession of the said premises to Bai Ratanbai that they have no right whatsoever in respect of the use and occupation of the said shop premises. Bai Ratanbai has also entered into an agreement dated 13-10-1978 with M/s Varsha Traders under which the said M/ s. Varsha Traders have been permitted to occupy such portion of the said shop premises as may be convenient for storing their goods.