N C T CHIDAMBARAM PILLAI Vs. SVSUBRAMANIA AYYAR

JUDGEMENT

(1.) These petitions are by respondents 5 and 6 to a petition filed by the special receiver appointed in I.P. No.20 of 1925 in which respondents 1 to 4 were adjudicated insolvents to avoid a transfer by the insolvents, Ex. 1, dated 19 July 1925 of a decree obtained by them to respondent 5 and also a sub transfer by respondent 5 of the same decree by Ex. 2, dated 9 April 1926 to respondent 6 on the ground that Ex. 1 was a fraudulent transfer voidable against the receiver Under Section 53 and that Ex. 2 was also a transfer without consideration and invalid against the receiver. Certain dates are important. Ex. 1 is as already stated dated 19 July 1925. The insolvency petition was dated 13 August 1925 and the adjudication followed on 9 February 1926.

(2.) The subtransfer by respondents 5 to 6 was on 9 April 1926 and the present petition to avoid the transfer and retransfer was filed on 3 May 1926. The learned Subordinate Judge who heard the petition dismissed it holding that the transfer Ex. 1 was supported by consideration to the full extent expressed upon it, viz., Rs. 3,000 that the consideration was adequate because the decree transferred although ex facie for an amount of about Rs. 7,500 had been partially satisfied to the extent of Rs. 4,000; that there were no circumstances showing want of bona fides and so far as Ex. 2 the subtransfer was concerned, on the ground that it was not a transfer which could be annulled under the Provincial Insolvency Act. For this opinion he relied upon the decision in Ponnammai Ammal V/s. District Official Receiver, Tinnevelly . He also held that the subtransfer was also supported by consideration and good faith. The receiver appealed to the learned District Judge of Tinnevelly. He reversed the Subordinate Judge's decision holding that the Rs. 3,000 mentioned in Ex. 1 was not an adequate consideration even if it should be supposed that that sum was paid which however he seems to have left without expressing a decided opinion thereon.

(3.) On the question of good faith the learned Judge came to the conclusion that the transfer Ex. 1 was not executed on the date it bears but must have been antedated. For this he relied upon certain letters, Ex. C., series, produced by the receiver through the insolvents which the Subordinate Judge had held to be not free from doubt. The Judge has not stated when in his view the transfer Ex. 1 was executed but says that it was fraudulently brought into existence after the insolvency petition was filed to screen the insolvent's estate from its creditors. As to the subtransfer Ex. 2 he merely said that there was nothing to assign. On these findings he reversed the order of the lower Court and declared both Exs. 1 and 2 invalid.