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Madras High Court
Sharfuniya Begum Sahiba vs (Sayyad) Pacha Sahib And Ors. on 2 August, 1927
Equivalent citations: AIR 1928 Mad 793


1. It is to be regretted that the respondents in this second appeal are not represented before us. For that reason it became clearly more necessary to examine carefully the judgments of both the lower Courts and the grounds on which they are based.

2. The plaintiff is the appellant here. She is a Mahomedan married woman and she instituted this suit for a declaration that a certain transfer of property in her favour by her husband, defendant 1, was for consideration and that, therefore, she was the owner of the property and that the property was not liable to be attached at the instance of defendant 1’s, creditors, who are also parties to this suit. She made a claim in execution proceedings which was disallowed and this is what is generally called a regular suit. We do not find that the defence to this action was that the sale, deed was merely nominal, or, in other words, was a sham and that, though there was an apparent transfer of the title, still the title itself continued with defendant 1. That was not the case alleged, nor do we find it to be the case either sought to be made out or found by the lower Courts. On the other hand, the finding given distinctly in terms by both the lower Courts is that it was a transaction in fraud of creditors. The consideration for the sale has been found by both the Courts. The mehar debt due to the plaintiff has been found to be true, though it is not clear how much was due to the plaintiff from defendant 1 in respect of the mahar and whether at the time of this transaction there was still due and payable any interest therefor.

3. If, therefore, there was consideration, no question of the adequacy of consideration does arise or can arise in this case because there is no plea on the part of the defendants that the document, while it was in part good and proper and for consideration, was for the other part merely nominal, there being a resulting trust in favour of defendant 1 in respect of such portion. That is not their pleas nor is it the finding. On the finding of both the Courts that there was a debt due from defendant 1 to the plaintiff, it seems difficult to understand how they could have come to the conclusion that it was in fraud of creditors. We do not wish to be understood to say that in no case where the transaction amounts merely to undue preference there can be made out a case also of the transaction being in fraud of creditors. But, generally speaking, the one thing is different from the other and if it is sought to make out that a transaction is really in fraud of creditors in such circumstances, it must be distinctly alleged and proved. The burden of proving it, is on the creditors who allege it apart from Clause 2, Section 53, T.P. Act, because otherwise the Court finding the transaction to be sup-ported by consideration and proved by a registered deed will be bound to give effect to it and support it.

4. In this case it is somewhat curious that the creditor defendants have really called no evidence at all, and it is difficult even from the evidence adduced on behalf of the plaintiff and the cross-examination of the plaintiff’s witnesses on behalf of these defendants to discover what exactly the case of the defendants was with regard to their charge that this alienation was in fraud of creditors. There is some evidence which there is no reason to reject to the effect that defendant 1, at the time of the alienation, was possessed of other property of some value. The matter has not been pursued and it has not been sought to be elicited what the value of the remaining property of defendant 1 was, and how, if so, defendant 1 was seeking by this alienation to defeat or delay his creditors. There can be no question of any undue preference in this case because the matter does not arise in insolvency. No doubt, there was, as there generally is in respect of such transactions, a great deal of suspicion attaching to it. The alienation was in favour of the wife of defendant 1, the consideration was the mahar; and apparently there were also at or about the time of the alienation some creditors of defendant 1. But, as has been pointed out by their Lordships of the Judicial Committee in Mina Kumari Bibi v. Bijoy Singh Dudhuria A.I.R. 1916 P.C. 238, however suspicious a transaction may be, there must be evidence on which the fraudulent intention must be made out. Both the lower Courts appear to have proceeded on the assumption that it was on the plaintiff to establish affirmatively that the transaction was not only a legal one and supported by consideration, but was entirely free from any taint of suspicion. It seems to us, therefore, that the lower appellate Court was wrong in merely giving effect to this suspicion and finding against the alienation, the subject of this suit. The finding, therefore, of the lower Courts with regard to the transaction having been in fraud of creditors cannot be supported, more especially in the absence of any evidence adduced by the defendants. The second appeal must therefore, be allowed and the plaintiff’s suit decreed with costs throughout to be paid by defendants 3 and 4.

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