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Madras High Court
Marwadi Samnaji Jawanmull Firm vs Sripathi Rao on 9 December, 1926
Equivalent citations: AIR 1927 Mad 1144 a, 101 Ind Cas 568


1. This is not a case of fraudulent preference, for the mortgage of the appellant is beyond three months from the date of the adjudication. If it appears that the object of the mortgage is to defeat, defraud or delay creditors, it is voidable under Section 53. In one sense, when one creditor obtains a preference for himself by taking a mortgage or sale, it may operate to the prejudice of other creditors, but such transactions are perfectly valid unless they are within three months from the adjudication. The primary object of the transaction is to protect himself and not to defeat other creditors and a creditor is entitled to do it: see Musahar Sahu v. Lala Hakim Lal A. I. R. 1915 P. C. 115 and Natha v. Magan Chand [1903] 27 Bom. 322.

2. The appeal is allowed with costs throughout.

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