SYED MAHAMAD MALIHA Vs. CHOUDHURI MAHAMMAD ISMAIL KHAN

JUDGEMENT

(1.) This is an appeal from the order of the District Judge of Bakarganj setting aside his previous order directing the sale by the Receiver of 3 Karsha holdings which were held by Shah Mafazzal Hossain who had been adjudged insolvent, and ordering the exclusion of these properties from the schedule of the insolvent's property. The appellant is the contesting creditor. It appears that the insolvent made an agreement with the appellant for the sale of these very properties (in which the insolvent had an eight annas share) for Rs. 2,000 and he took Rs. 900 as earnest money. The sale was not completed. The insolvent was unable to pay the appellant but he gave him a handnote. The appellant brought a suit on the handnote and obtained a decree on 9 May 1917. He applied for execution on 8 May 1920. The insolvent put in an objection under Section 47 Civil P.C. alleging payment of Rs. 801 in cash. The objection was disallowed on 27 November 1920, and the application for execution also struck off. The appellant filed his second application for execution on 24 January 1922 and the insolvent was arrested on 24 January, 1922. On the next day he filed his application for insolvency. He was adjudged an insolvent in due course and a Receiver appointed. Soon after the contesting creditor (the appellant) moved the Receiver in respect of these 3 Karsha properties and asked him to sell the properties.

(2.) It appears that the insolvent had in the meantime surrendered these holdings to Choudhuri Mahammad Ismail Khan the landlord who is his relative and in whose service he was at one time. The deed purports to have been executed on 3 April 1920. It was registered on 17 June 1920. It will be noticed that the first application for execution by the appellant was on 8 May 1920, i.e. between these two dates. The Receiver held an enquiry and reported to the Judge that the deed of istafa might be declared to be a benami document. The Judge agreed and directed the Receiver to sell the properties. The insolvent appeared and filed an objection but he was overruled. Thereafter Choudhuri Ismail Khan appeared and the learned Judge held an enquiry and passed the order from which this appeal has been preferred,

(3.) There is another circumstance which has to be stated. It is this. On 2 April, 1921 a bainapatra was executed by the insolvent and his wife in favour of Ismail Ohoudhuri for sale of nine other properties (which were talukdari tenures) for a sum of Rs. 3000. It was stated that 8 items of these properties belonged to the insolvent but that he had transferred them to his wife in lieu of her dower and the 9 item was purchased by the wife from her own money. The actual conveyance was executed by the insolvent and his wife on 12 June 1920. The istafa in question and the kabala were registered on the same day viz., 17 June 1920. The contesting creditor appellant does not challenge the sale of the talukdari tenures. His case is that the istafa or surrender was a collusive transaction. The question for decision is whether this deed of surrender executed by the insolvent in favour of Ismail Choudhuri within 2 years of his Application for insolvency is voidable against the Receiver.