PALANIANDI CHETTY Vs. MVAPPAVU CHETTIAR

JUDGEMENT

(1.) Although this appeal raises questions of difficulty and importance the facts material to it can be stated very shortly. The plaintiff sued for a declaration that he was the absolute owner by purchase of the suit properties as against the defendants who were holders of decrees against his vendor. The plaintiff s title was based on a sale-deed dated the 5th of September 1903 from Velayudan Cheity to himself for a consideration of Rs. 14,250. It has been found that this deed and the transaction which it carried out was brought into existence with intent to defraud and defeat the creditors of the transferor, and that finding is not and cannot be challenged; but the appellant contends that it is not competent to the defendant to invoke that finding in aid in the present proceedings. POP the moment, I am assuming that the transaction in question was in this sense a real one, that it effected and was meant to effect a real transfer of the property from the transferor to the transferee, that is to say, it was not a merely colourable paper transaction leaving the real beneficial enjoyment of the property with him who purported to transfer it. Had the transaction been a merely colourable one, it would, no doubt, have been void and the plaintiff could not have succeeded in his action. His contention is that if it is only voidable it stands good until set aside in proceedings appropriate for the purpose, such proceedings being a suit brought for the express purpose by or on behalf of all the creditors of the transferor.

(2.) The material section is Section 53 of the Transfer of Property Act, which is as follows: "Every transfer of immoveable property, made with intent to defraud prior or subsequent transferees thereof for consideration, or co-owners or other persons having an interest in such property, or to defeat or delay the creditors of the transferor, is voidable at the option of any person so defrauded, defeated or delayed."

(3.) The section broadly reproduces the effect of the famous Statute of Elizabeth, 13 Eliz. C. 5, and the English decisions on that Statute are always referred to in India as authorities for the construction of the Indian section. In England it has been held that a suit to avoid a settlement must be brought on behalf of all creditors: Reese River Silver Mining Company v. Atwell (1869) 7 Eq. 347 : 20 L.T. 183 : 17 W.R. 601, and that decision has been followed in India in Hakim Lal v. Mooshahar Sahu 34 C. 999: 11 C.W.N. 889 : 6 C.L.J. 410 and Burjori Dorabji Patel v. Dhunbai 16 B. 1 : 8 Ind. Dec. (N.S.) 479. But it has been held by the English Courts that where the plaintiff is a judgment-creditor who has sued out a Writ of Legit, he may sue on his own behalf without reference to the general body of creditors and impeach the transfer as having been executed with intent to defraud his particular claim: Blenkinsopp v. Blenkinsopp (1852) 1 De G.M. and G. 495 : 12 Beav. 568 : 21 L.J. Ch. 401 : 16 Jur. 787 : 42 B.R. 644 : 18 L.T. (O.S.) 324 : 91 R.R. 147. That case expressly left open the question as to whether the deed could be set aside by a person who had signed judgment but not sued out the writ. We are asked to say that in India the section may be called in aid by a creditor who has obtained a decree but "has not attached the properties, it being conceded that a creditor who has attached the properties can use the section as a weapon of defence as well as of offence in a case like the present. See Rajani Kumar Dass v. Gaur Kishore Shaha 35 C. 1051 : 7 C.L.J. 386 : 12 C.W.N. 76 and Chidambaram Chettiar v. Sami Aiyar 30 M. 6 : 16 M.L.J. 427 : 1 M.L.T. 351 The matter has been definitely decided by the High Court of Bombay in Ishar Timappa v. Devar Venkappa 27 B. 146 : 5 Bom. L.R. 19, a decision to which Jenkins, C.J., was a party. In the absence of this Court, I propose to consider the matter on principle.