MADINA BIBI SAHIBA Vs. ISMAIL DURGA ASSOCIATION THROUGH ITS PRESENT SECRETARY HAJI MOHAMMAD MOULANA SAHIB

JUDGEMENT

(1.) The appellant is the wife of the second respondent. In 1931 the respondent association obtained two money decrees against the second respondent for an aggregate sum of Rs. 894. In 1934, in execution of these decrees the association attached five houses in Madura as property belonging to the judgment-debtor. The appellant objected to the attachment and her objection was successful. The appellant claimed title to the houses and other properties under a deed of sale executed in her favour by her husband on the 16 of September, 1932. As the result of the removal of the attachment the association filed in the Court of the Subordinate judge of Madura the suit out of which this appeal arises for a declaration that the deed of sale was executed in fraud of creditors "nominally and colourably". In the meantime the second respondent had been adjudicated an insolvent and permission of the Official Receiver was sought, and granted, for the institution of the suit. The association, however, did not apply for an order under the provisions of Order 1, Rule 8 of the Civil P. C. permitting it to sue on behalf of all the creditors and in spite of objection proceeded with the suit for its own benefit and not for the benefit of the creditors generally. The association based its claim for the relief on two grounds. In the first place it said that the transaction was a sham and in the second place that the transfer was a fraudulent transaction, entered into with a view to defeat and delay the creditors. The alleged consideration for the sale-deed was a sum of Rs. 10,000. The Subordinate Judge held that the transaction was not a nominal one as the appellant had given consideration to the extent of Rs. 8,000, but he considered that the transaction constituted a fraud on the creditors as the properties were worth Rs. 18,000. In accordance with this finding he granted the association a declaration that the sale- deed was invalid, being a fraud on the creditors, and directed that it be annulled. He also vacated the order passed in favour of the appellant in the execution proceedings, but allowed her to rank as a creditor of her husband to the extent of the Rs. 8,000 which she had paid.

(2.) The appellant has persisted in her contention that the suit as framed did not lie and she disputes the finding of the Subordinate Judge that the transaction was a fraud on the creditors. If her first contention is sound, it will not be, necessary for the Court to consider the merits of the case. The appellant says that it was incumbent upon the association to sue on behalf of itself and all the other creditors of the second respondent and relies on the provisions of Section 53 of the Transfer of Property Act. That section says that every transfer of immovable property, made with intent to defeat or delay the creditors of the transferor, shall be voidable at the option of any creditor so defeated or delayed. By the Transfer of Property (Amendment) Act, 1929, the following provision was-added to the section: A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to and a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of or for the benefit of, all the creditors.

(3.) The appellant says that as this provision has not been complied with the suit must fail. On the other hand the association says that Order 21, Rule 63 of the Civil P. C. gives to a decree-holder whose attachment has been disallowed the right to have the question decided by suit and the rule must be read entirely independent of the provisions of Section 53 of the Transfer of Property Act.