Lord Atkin:-

This is an appeal from the High Court of Judicature at Rangoon in a suit in which the plaintiffs claimed to set aside, on the ground of fraud, a sale of land to the defendant Kasi, now an insolvent, whose estate is represented by the Official Assignee. The District Judge of Bassein made an order in favour of the plaintiffs : but his decision was reversed by the High Court, who found that the fraud was not established and dismissed the suit. The evidence is voluminous and consists in large part of entries in account books. Their Lordships have fully examined it with the assistance of the learned counsel for the appellants, but finding themselves in substantial accord with the views of the facts expressed in the judgments in the High Court and with their reasons for differing from the trial Judge, do not find it necessary to discuss the facts again at length. The substance of the case is that the plaintiffs are nominal owners of seven-eighths share in A. L. A. R. N. Chettiar firm (who will be styled the plaintiffs' firm) carrying on a moneylending business in Kyaunggon, Lower Burma. The true owner of the share was one Nagappa: the remaining one-eighth share was held by defendant 2, Subbaya, who was a salaried partner under an agreement with Nagappa by which Subbaya was to act as managing partner. The plaintiffs' firm was possessed as part of its assets of 1314 acres of paddy land and a house in and about Kyaunggon, and in January 1931, Subbaya, as managing partner, agreed to sell this property to the defendant Kasi for Rs. 70,000. The transaction was carried out by a registered deed of sale dated 5th January 1931, and on completion Kasi paid the purchase price by a cheque on the National Bank of India, which was duly paid: subsequently, though there was some controversy about this, he took possession. The cheque was drawn by a local banking firm R. M. P. M. which carried on an extensive business in Rangoon. Kasi had at one time been the "agent" of this firm: but had been succeeded in this post by one Somasundaram. Kasi to raise the Rs. 70,000 had borrowed the amount in different sums from five Chettiar firms who thereupon had made this sum available for him in the R. M. P. M. bank. The bank drew a cheque for the amount on the National Bank of India in favour of Kasi, who endorsed it to the plaintiffs' firm, and all the parties attended at the office of the National Bank where the cheque was paid.

It is not now disputed that the sale was for a fair value, and that Subbaya had authority as partner to sell. Both these issues were originally raised by the plaintiffs, but were determined against them by the trial Judge. The transaction so far appears a normal and regular transaction. But the plaintiffs allege that the apparent sale was fictitious and entered into under a conspiracy between Kasi and Subbaya to defraud the plaintiffs' firm. It is alleged that the consideration money was returned to Kasi by Subbaya the same day, with the result that the firm lost their property without the benefit of the price, while Kasi enjoyed the property and the price. One of the difficulties in the case has been to appreciate the nature of this conspiracy. It is plain from the plaintiffs' case that Kasi borrowed the Rs. 70,000 and made himself personally liable for the amount, and that he did not use the returned money to pay off the lenders; and there is no evidence that he applied any part of it for the benefit of Subbaya. And it would appear strange that Subbaya should hand over property of the firm in which he had one-eighth interest to Kasi for nothing. The suggestion made was that the scheme enabled Subbaya to enter the price as a credit to the firm, and then by book-keeping entries wipe out a debt due to the plaintiffs' firm from the Letpadan firm of which he and his elder brother were partners, debiting himself with the whole price. This is in fact what he did, but it hardly seems to require the assistance of Kasi : especially a