9911796707
TMI Blog1938 (7) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... me, on 17th Sraban 1322 last I appointed Babu Ganesh Chandra Das Gupta, Babu Jadab Chandra Roy and Babu Indu Bhusan Sen Gupta, pleaders, as trustees of my estate and gave them entire charge. But owing to want of time they being unable to do anything resigned the office of trustees by giving a notice to me on 30th Chaitra 1334 Rule 8. So I took charge of my estate again and commencing to carry on the work I have not been able to pay any part of my previous debts; on the other hand I had to increase the amount of the debt by incurring new loans. Under these circumstances, I having requested you with the view that I might make over to you the charge of my estate, appointing you trustee of my entire estate for paying off my said debts and you having acceded to my request have agreed to become the trustee; therefore by this trust deed I make over my entire estate to your hands; you being my representative as trustee on the strength of this trust deed will manage the 16 annas estate and pay off the debts. A description of the list of the properties of my estate is given below. If through mistake any property has been left out or if any property be acquired with the income of the same or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or shall be competent to interfere with the management or realization of the estate in any way, nor shall I or my heirs have any right to do so. For the maintenance, etc. expenses of my family you will pay from the estate such amount as you will decide. After the creation of the trust deed I or my heirs shall not be competent to take any money or papers from any tenant or officer. You will be competent to retire from the office of the trustee at any time on giving me one month's previous notice. 2. Certain properties belonging to the judgment, debtor were attached on 8th September 1931, in the execution case mentioned above and the case was dismissed on that date. On 7th December 1932 the decree was again executed. In the petition for execution (Ex. 2) the plaintiff was added as a judgment-debtor. 3. The properties which are the subject-matter of the present litigation and which were declared by Ex. 12 to be trust properties were thereafter attached in execution of this decree and were purchased by defendants 1 to 4 on 1st May 1934. They obtained delivery of possession through Court on 22nd August 1934. On 25th September 1935 the plaintiff instituted the present suit fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in place of the judgment-debtor in the second execution case. I cannot therefore accept the appellant's case that the plaintiff was substituted on his own application in the second execution case. It is true that where a question arises as to whether any person is or is not the representative of a party such question is to be determined by the executing Court for purposes of Section 47. In this case the question of the plaintiff being the representative of the judgment-debtor did not arise in the execution proceedings. It was neither raised nor determined. I am therefore of opinion. that the present suit is not barred under Section 47 of the Code. 6. I do not find any substance in the second point also. The terms of the trust deed which had been quoted above clearly indicate that a trust was created. Under Section 5, Trusts Act, no trust in relation to immovable property is valid unless declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered and no trust in relation to moveable property is valid unless declared as aforesaid or unless the ownership of the property is transferred to the trustee. Under Section 6 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust is not an illusory trust. There is therefore no substance in this point also. 8. As regards the fourth point, the contention of Mr. Gupta is that the trust is a fraudulent transfer within the meaning of Section 53, T.P. Act, as the effect of the document is to delay the payment of the debts to the creditors. A trust deed for the benefit of the creditors is prima facie not fraudulent within the meaning of the statute: 13 Eliz., Chap. V; Godfrey v. Poole (1888) 13 AC 497. But if it is a cloak for retaining a benefit for the debtor at the expense of the creditor, it is liable to be set aside under that statute at the instance of creditors who are not parties to it: Spencer v. Slater (1878) 4 QBD 13. In determining the validity of such trust the deed must be considered as a whole. If it is substantially for the benefit of the creditors a proviso beneficial to the debtor, if consistent with the tenor and object of the trust, will not render the deed void: Alton v. Harrison (1869) 4 Ch A 622. Sub-section (1) of Section 53, T.P. Act, reproduces in substance the provisions contained in 13 Eliz., Chap. V, with some modifications which are not material for the purpose of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mode in which his own property shall be applied for his own benefit, and the conveyance has the same effect as i the debtor had delivered money to an agent to pay his creditors, in which case he might recall the money before the agent had made any payment or communication to them. 11. The contention on the basis of the passages cited above is that although the trust was created, the beneficial interest of the author of the trust was still there and was liable to be sold in execution of the decree against him and consequently the purchasers are entitled to the beneficial interest which the author of the trust had in the trust properties. In England the trusts arising under general assignments for the benefit: of creditors were in a peculiar sense, the objects of equity jurisdiction. But the Bankruptcy Court is now charged with the judicial administration of the property comprised in these assignments by the Deeds of Arrangement Act, 1914 (4 and 5, George, V, C. 47), Section 23. And this subject generally has since the Bankruptcy Act, 1914 (4 and 5 George V, C. 59), lost much of its importance considered as a point of equity jurisdiction, for, by Section 1 (d) of that Act, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h has to be determined by the executing Court under the very terms of Section 47 (3). It is therefore not a question which could be agitated in this suit at all. It was actually raise in the course of certain execution proceedings, and it was decided against the plaintiff. The result of this is that the present suit must fail on the merits. Now, that argument is based upon extremely flimsy material. In fact, there is nothing to support it but the terms of Order No. 5 made in money execution case No. 161 of 1930. The terms of that Order are quite inconsistent with what happened later on. When the documentary evidence with regard to this matter was placed before us, I reached the conclusion that the plaintiff was never substituted for that judgment-debtor but was merely added as a party. I notice that this was the conclusion which was reached by the learned Subordinate Judge. This is perhaps not surprising because it is in accordance with the actual evidence given by the appellant's own witness, Basanta Kumar Das Gupta. 14. I accordingly agree with the conclusion reached by the learned Subordinate Judge. The plaintiff appears to be a transparently honest man. He has no persona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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