SALIG RAM Vs. LACHMI PRASAD

JUDGEMENT

(1.) Ramanand and Naurangi held two decrees against Abdur Rahman and Chhabraji Kuer in suits Nos. 144 and 38 of 1910. The decree-holders were in considerable financial difficulty about this time. They sold the decrees to Ram Charan defendant 1, who is the father of the plaintiffs on 31 August 1911. This assignment was clearly a cloak to defeat or delay creditors and was not intended to be a genuine sale for consideration. The decrees were put into execution and in July 1912 Ram Charan intimated that he had received the decretal amounts in their entirety and prayed that the execution cases be struck off in full satisfaction.

(2.) Ramanand and Naurangi applied for bankruptcy on 8 October 1913. They were adjudicated insolvents on 26 August 1914.

(3.) The Official Receiver applied to the learned District Judge in insolvency that the assignment of the decrees was a colourable transaction, that it was fictitious, was without consideration and was a mere device to defraud the creditors. He prayed for the annulment of the transfer. On 3 July 1916 the learned District Judge granted the application, holding that the sale was a fictitious transaction and he further directed that the property should be transferred to the receiver. There was an appeal to this Court from the order of the District Judge, but the appeal was dismissed and the order upheld: Jagrup Sahu V/s. Ramanand Sahu [1917] 39 All. 633.