9911796707
TMI Blog1964 (9) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... to this appeal are these : Abu Bucker Sait, the second respondent, is a resident of Yercaud in Salem District. He was running a business in cloth at Madurai since June 20, 1945, under the name of A. B. H. Hussain and Company. Besides that, he possessed about 290 acres of coffee plantation in Yercaud. On August 9, 1945, he purchased for a sum of Rs. 35,500 an extent of 9 acres of land in Kichilipalayam village, adjoining Salem Town. Besides, he had substantial balances in his bank accounts during the period material to the present case. There was also a terraced house owned by him in Guthiana in the State of Kutch. Abu Bucker had two wives and children by them. The senior wife was living at Guthiana, while the junior wife and children born of her were with him (the second respondent) at Yercaud. The objects of his affection were only his wives and children, as is evident from the fact that under a registered will dated November 29, 1945, he disposed of his entire properties in their favour. It is claimed on behalf of the appellants that soon after the execution of the will, the second respondent realised that under the Mohammedan law its provisions could not stand to the extent of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment of the Grange Coffee Estate. That order is dated 19th September, 1956. The appellants then came forward with a claim before the Collector stating that they, and not the second respondent, their father, were the owners of the estate and that they were also in possession of the same. The Collector, though he had his own misgivings about the bona fides of the transaction relating to the gift under exhibit A-9, released the properties from attachment. Thereupon, the suit, out of which this appeal arises, was instituted by the first respondent for setting aside that summary order. The gift deed was attacked on the ground that it was a sham document and that, even otherwise, possession not having been delivered, no title passed to the donees. There was also a further contention that it could not avail against the first respondent, as it was conceived for the purpose of defeating and delaying the creditors of the donor. The learned subordinate judge found that the gift deed was a real transaction and that it was sufficient for the purpose of its validity that there was a declaration on the part of the donor that he had made over possession to his minor sons. The correctness of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. C. No. 1 of 1957. The result of it was that the tax liability for the year 1948-49 stood reduced to Rs. 10,062. The other properties which the second respondent had, namely, his interest in the javuli business and the bank deposits, which were augmented by the sale of the Kichilipalayam lands, were more than sufficient to pay this liability. The case for the first respondent is that, although at the time when the deed of gift was executed there were no creditors, the second respondent must have intended to defeat his future creditors. It is now well-settled that, for the purpose of avoiding a transfer by a debtor under section 53 of the Transfer of Property Act, it is not necessary that the transferor should have been actually indebted at the time he makes the transfer. A transfer intended to cheat future creditors would be equally voidable at their instance. For example, if a man were to settle all his properties on others, with a view to entering a hazardous business, it can easily be assumed that his intention was to defeat his creditors in the business to be started by him ; such a transfer could be avoided by his creditors. The law on this subject is stated in Halsbury's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Tek Chand J., after referring to the above principle, gives the following illustration ; " But where there are no debts due at the time and the transferor runs into indebtedness subsequently, the presumption will be regulated by the peculiar circumstances of each particular case. If, for instance, the transfer was made to ward off the effects of a threatened litigation or in anticipation of the transferor embarking upon a commercial venture or on the eve of his going into trade, the intent to defeat or delay future creditors will be presumed. But in other circumstances the transaction will be presumed to be bona fide and it will lie on the future creditors to prove that the transfer was made with an intent to defeat or delay them. In Ex parte Mercer : In re Wise, Cave J. (as he then was) observed at page 293 : " In most of the cases which have been cited the settlor was a trader, and undoubtedly when a trader makes a settlement, more especially if he does so when he is just about to commence a course of trade which may turn out to be disastrous, it is difficult to come to any other conclusion than that he contemplates the possibility of his trade being unfortunate, and wishes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors can therefore be drawn because the second respondent disposed of his lands shortly after making the gift. The sale of the Kichilipalayam lands might perhaps be due to the fact that the second respondent was making a large profit out of that transaction ; that might not have been conceived as a means of denuding himself of the property to cheat his creditors. The evidence in the case shows that on 30th September, 1947, the second respondent withdrew a sum of a lakh of rupees with a view to take that sum to Pakistan. Presumably, he had at that time made up his mind to migrate to that country. It was, perhaps, because of that intention he wanted to settle properties on his minor sons, himself taking away the cash to the extent aforesaid to Pakistan. The business at Madurai was managed by his brother and he was, perhaps, content to allow it to be so done. These facts make it probable that the execution of the gift deed was part of the arrangement conceived by the second respondent to facilitate his migration to Pakistan. If he were to go and settle in Pakistan, there could be no creditors after he left India. The transfer could not therefore be one to defeat or delay any cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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