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1930 Supreme(SC) 68
Privy Council At Oudh
Sir Binod Mitter, Sir Lancelot Sanderson , Justice Viscount Dunedin, JJ.
Mohammad Ali Mohammad Khan -Appellant
Versus
Bismillah Begam and another -Resopndent
Privy Council Appeal No. 63 of 1928, Oudh Appeal No. 13 of 1927
Decided On : 24-07-1930
Jopling, Wallach, K.C. Dunne
A transfer of property via gift or wakf is void if it is a fraudulent transaction intended to defeat the claims of creditors and lacks a bona fide intention to divest ownership.
Headnote:(A) Civil Procedure Code, 1908 - Order 21, Rules 58, 61 and 63 - Execution of decree - Attachment of property - Claim by third party - Burden of proof - In proceedings to determine whether property is liable to attachment, the claimant must establish that the deeds of transfer were bona fide and intended to pass the beneficial interest in the premises.
(B) Gift - Validity of transaction - Where a deed of gift is executed to defeat the claims of a creditor and is unsupported by cogent evidence of consideration, such as unsatisfied dower, and the evidence of the parties is found untrustworthy, the deed is held to be false and fraudulent.
(C) Wakf - Intention to divest ownership - A deed of wakf executed without a genuine intention to divest ownership of the property, intended merely as a shield against potential claims of a creditor, does not constitute a valid wakf.
Facts of the case:
A decree-holder attached certain properties in execution of a money decree against a judgment-debtor. The judgment-debtor's wife filed a claim asserting that the properties were not liable to attachment, contending that a portion was wakf property and another portion had been transferred to her in lieu of unsatisfied dower. The trial court dismissed the claim, finding the documents fictitious and created with fraudulent intention. This was reversed by the appellate court, leading to the present appeal.
Findings of Court:
The court found the evidence regarding the unsatisfied dower and the source of funds used for the construction of buildings on the property to be improbable and untrustworthy. It was noted that the judgment-debtor had later procured a formal conveyance of the properties in his own name, which was inconsistent with the existence of a valid wakf.
Issues: Whether the deed of gift and the deed of wakf were bona fide transactions or were executed fraudulently to defeat the claims of the decree-holder.
Ratio Decidendi: The court held that the deed of gift was fraudulent as there was no credible proof of unsatisfied dower and the transaction was intended to defeat the decree-holder's claims. Similarly, the deed of wakf was invalid because the judgment-debtor never intended to divest himself of ownership, utilizing the document only as a shield against creditors.
Result: Appeal allowed.
Legal Category Hierarchy
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practice and procedure
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execution of decree
- attachment of property
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execution of decree
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property law
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transfer of property
- gift
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islamic law
- wakf
- dower
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transfer of property
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evidence
- credibility of witnesses
Sir Binod Mitter.-
This is an appeal from a decree of the Chief Court of Oudh, dated 11th February 1927, which varied a decree of the Subordinate Judge of Mohanlal Ganj, Lucknow, dated 31st May 1926, and decreed in part the plaintiff's suit with costs.
The appellant, on 4th November 1921, instituted a suit against Haji Siddique Hasan (hereinafter referred to as defendant 2) to which suit plaintiff-respondent 1 (who is the wife of defendant 2) was not a party, for the recovery of money partly as damages for breach of contract and partly by way of recovery of advances made to defendant 2 for the purchase of goods as commission agent. This suit was decreed for a sum a little over Rs. 24,000 on 25th February 1924, but on appeal was reduced by about Rs. 4,000.
After the appellant had obtained his decree in the first Court and whilst an appeal was pending, the appellant, as decree-holder, attached plots 44, 44a, 45 and 46 situated on the New Sanitary Road, Lucknow, with buildings thereon, in execution of his decree, alleging that the same belonged to defendant 2. The present plaintiff (his wife) claimed under O. 21, R. 58, Civil PC, that these plots were not liable to attachment as a portion of plot 45 and the whole plot 46 was wakf property, and the remaining portion, i. e., a portion of plots 45 and 44, had been transferred to her in lieu of her claim for dower. Her claim was dismissed under the provisions of O. 21, R. 61, Civil PC, on 26th January 1925, on the ground that the wakf deed and the deed of gift were merely fictitious documents created with a fraudulent intention and that defendant 2 and not the plaintiff was in possession of the said plots with the buildings thereon.
Plaintiff thereupon instituted the suit out of which this appeal arises on 12th February 1925, against the defendant for a declaration that the deed of wakf and deed of gift dated 19th November 1916, and 30th June 1917, respectively, are valid and that the said premises were not liable to attachment and sale.
The learned Subordinate Judge came to the conclusion that the wakf and the deed of gift did not represent genuine transactions, that there never was a bona fide intention on the part of defendant 2 to make the wakf and the gift, and that the same were never given effect to. He further held that these documents were executed to defeat any claim which the appellant might make against defendant 2, and that the plaintiff was not entitled to the relief she claimed in the suit.
The learned Judges on appeal in the Chief Court reversed that judgment and hence this appeal.
Defendant 2 was a tahsildar of the appellant on a small salary until the year 1912, when he went on a pilgrimage to Mecca, and after his return from the pilgrimage he was employed by the appellant till 1921 as a commission agent to purchase grain and other articles for the appellant's estate and was paid remuneration at the rate, of one anna in the rupee on the price of the commodities purchased and also his expenses. In the course of his employment as commission agent large sums of money from time to time were advanced by the appellant to him for the purchase of goods and these sums and the amounts due to him for goods supplied were entered in the account books of the appellant's estate, but he had control over a portion of such sums and could draw upon the same.
In March 1913 defendant 2 purchased the said plots 45 and 46 which adjoined a ruined mosque. After his purchase, with the sanction of the municipality, he erected buildings on a portion of plot 45 and on plot 46 at a cost of about Rs. 15,000, and also erected a new mosque, which he alleged cost him Rs. 2,000, and thereafter on 12th August 1915, he informed the secretary of the Municipal Board of Lucknow that he had transferred the said premises to his wife, i. e., the plaintiff, and requested the secretary to put the plots in her name in place of his own in the office records. The secretary gave effect to this request on 2nd October 1915.
